EU CBAM to Impact South Korean Steel Makers
Business Korea reported that South Korean steel industry is likely to be most affected by the European Union’s Carbon Border Adjustment Mechanism. EY Hanyoung Korea pointed out in its recent report that the steel industry’s carbon border tax burden will amount to more than USD 141.9 million in 2023 if the European Union imposes a carbon border tax of USD 30.6 per ton that year. It said “The carbon border tax-to-exports ratio for 2023 is estimated at 5%. If the tax goes up to USD 75 per tonne in 2030, the tax burden and the ratio will reach USD347.7 million and 12.3%, respectively.”
According to the Korea International Trade Association, South Korea’s steel exports to the European Union were USD 1,523 million and over 2.21 million tonnes last year.
The Korea Institute for International Economic Policy also explained that South Korea’ steel product exports will undergo a decline of 11.7% if the tax is imposed on nonmetallic mineral and primary steel products.