Decarbonizing the global steel industry

Nii Akrofi Smart-Abbey:

How does lack of standards in producing and decarbonizing steel impact trade? What benefits would the industry derive once they are able to standardize decarbonization?

Deborah Elms:

Well, let me give you a simple example. So the European Union has their carbon border adjustment measurement, or CBAM, which is just coming into effect. And that can be very problematic for non-European countries, especially non-European developing countries who have to understand a very complicated piece of legislation. A lot of standards embedded in that apply that in a context that is very different in their domestic environment where there may be no rules at all on carbon at all. So they have to sort of catch up with what are European standards and then they have to be prepared, if they're not yet meeting those standards, to pay a price for their exports, which is new and can be quite expensive. And that is going to create real challenges for potential exporters around the world who are suddenly confronted with much higher freight compliance costs and potentially impossible levels of complexity that they have to address. So we’re going to see, differences between markets again. You can say yes, for climate reasons we absolutely need to do this, but for competitiveness reasons [it] can be really challenging. Again, especially, it's going to hit the hardest, as always, developing countries and smaller companies who really don't have the resources to comply.