EU’s CBAM could cost Korean steel sector $375 mn annually

Courtesy of Posco DX

A recent study found that the European Union‘s carbon border adjustment mechanism (CBAM), which will impose charges on imports of carbon-intensive goods such as steel into Europe, could cost the South Korean steel industry at least 500 billion won ($375 million) in 2026 when the regulation is set to take full effect.

A report released by the Korea Chamber of Commerce on Tuesday highlighted the potential impact of CBAM on the Korean steel sector, with an estimated cost of more than 3 trillion won over the next decade from 2026 onwards.

The CBAM aims to impose a carbon price on specific imports, equivalent to the internal EU price for carbon, via a border adjustment tax. The goal is to reduce carbon emissions, maintain the bloc’s competitive edge, and in the long term, encourage other countries to implement carbon costs for their producers.