Japan collaborates with South Korea to address EU's carbon border measures on steel

Japan's Ministry of Economy, Trade and Industry (METI) and the Ministry of Trade, Industry and Energy of the Republic of Korea (ROK) held a steel dialogue in Busan, South Korea, last week. The discussion centred on the European Union's (EU) recently introduced Carbon Border Adjustment Measures (CBAM) for steel and other products.

Both countries reaffirmed their commitment to work together in response to the uncertainties surrounding CBAM. The operational policy of the CBAM reporting system, which is currently in its pre-implementation phase, remained unclear. This lack of clarity has caused confusion among local importers and steelmakers exporting to Europe. Japan and South Korea will collaborate in consultations with the EU to address these concerns.

Confusion surrounding CBAM

A key concern is the confusion surrounding the CBAM reporting system, which requires detailed data on greenhouse gas emissions for steel exports to the EU. While the initial reporting period relied on standard values provided by the EU, a lack of clarity on future reporting requirements is causing uncertainty for both steel manufacturers and importers.

Potential conflict with WTO rules

There are concerns that the CBAM reporting system may conflict with World Trade Organisation (WTO) rules that emphasise national treatment. To address this, Japan and South Korea have agreed to collaborate by sharing information on how CBAM will impact their steel industries.

Other discussions

Aside from CBAM, the dialogue also covered topics such as steel trade between Japan and South Korea, supply and demand trends for steel scrap in Japan, and the development of green steel markets. These discussions aim to strengthen the relationship between the two countries and address challenges in the steel industry.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and BigMint.