Tata Steel Europe announced this week a €4/mt increase in carbon surcharge, in the wake of rising costs connected to the EU Emissions Trading System (ETS).
The European division of the Indian producer introduced a carbon surcharge to all its steel products sales last April, after the cost of the carbon allowances had exceeded €40/mt. The move was in line with the company's goal of reducing carbon emissions by 40 percent by 2030 and achieving carbon neutrality by 2050.
The carbon surcharge now amounts to €16/mt, against the initial €12/mt. At the beginning of July, the cost of EU emission quotas reached a maximum of €58/mt, while now it amounts to around €53/mt. Further hikes are expected as the European Commission confirmed earlier this month its intention to cut free allocations of ETS certificates faster than expected.
Other European steelmakers may also follow Tata Steel's example in the future by applying CO2 surcharges to their steel product prices.