Carbon Border Adjustment Mechanism (CBAM) – downstream extension

The batch galvanizing industry is an integral part of the steel value chain – acting as a sub-contract provider of long-term corrosion protection for steel products that are used mainly in construction, renewable energy and transport infrastructure sectors. Although our installations’ processes are not directly within the scope of CBAM assessments, the impact of carbon leakage and associated displacement of steel product manufacturing and fabrication of steel structures beyond the EU is a key issue for our industry’s competitiveness.

The majority of steel products and structures that are processed by our industry (i.e., manufactured by our customers) are already covered by the ‘7308’ series (and ‘7326’) of HS codes that are included in the Annex I to the CBAM Regulation.  Many of these products under ‘7308’, e.g., steel electricity transmission towers and steel mounting structures for solar PV installations are of a downstream type.

Our position on a CBAM extension and additional circumvention measures therefore focuses on:

1. That the anti-circumvention measures designed for basic goods, in particular any measures to avoid resource shuffling of lower carbon-intensive steel towards EU market imports, are also effective for ‘7308’ series of products that may be fundamentally different product types than the other steel basic goods.
2. That certain steel intensive downstream goods are included in the extension of CBAM, to complete the coverage that is already partially achieved through the ‘7308’ series.