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US Congress introduces carbon bill with potential impacts to steel imports

Wednesday, 10 July 2024 22:15:13 (GMT+3)   |   San Diego
       

According to the American Iron and Steel Institute (AISI), a new bill has been introduced to United States Congress to compare the greenhouse gas emissions of certain goods, including steel, made in the US to those made in other countries. The “PROVE IT Act” will ultimately affect steel imports from other countries with much higher emissions than the US.

“Trade-distorting policies in many countries continue to contribute to massive global overcapacity in steel — much of which is from countries that are producing steel that is much more carbon emissions-intensive than American steel, including China, India, Indonesia and other Southeast Asian nations,” according to Kevin Dempsey, president and CEO of AISI. “We need policies to demonstrate this current imbalance in emissions and hold the high emitting producers from overseas accountable for their much higher carbon emissions.”

This case is evaluated similarly to the Carbon Border Adjustment Mechanism (CBAM) in Europe. If the “PROVE IT Act” passes, it can eventually lead to an introduction of certain trade measures on imports for the origin of products which are more carbon emission intensive. These types of policies are largely welcomed by steelmakers because less imports means less competition they have to worry about.

The government process of passing the “PROVE IT Act” may take some time. If the bill is passed and some significant measures are adopted, it might have an impact on imports from certain countries in the long run.

From January to May this year, the US has imported 4.63 million mt of flat product and 2.15 million mt of long product from other countries. These numbers include both carbon and alloyed steel.


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