Oct 02, 2023
EU CBAM transition phase gets off to a more than jerky start – Stainless Espresso

EU CBAM transition phase gets off to a more than jerky start

On 1 October 2023, the European Union’s much-criticised CO2 border adjustment tax was launched. As of this date, CO2 emissions generated during the import of cement, fertiliser, iron, steel, aluminium and goods made from them must be reported to the EU CBAM authority.

EC not solely responsible for CBAM after all?

Even though the European Commission is in charge of the EU CBAM authority, national authorities such as customs and tax offices of the member states are still involved in the CBAM process. And there, as expected, it is already beginning to grate. For at the start of CBAM, not even all the competent authorities have been determined or the national bodies fully informed. Not even the platform for recording CO2 data is currently available and is supposed to be under development until at least the end of October 2023.

German authorities still unable to provide information?

An enquiry to the German Federal Environmental Agency regarding EU CBAM remained unanswered. The German customs authorities were also unable to comment on who was responsible for the CO2 border adjustment tax in the largest EU member state. 

Federal government remains silent on CBAM

It comes as little surprise that the Green Federal Office for Economic Affairs and Climate Protection, whose Minister Robert Habeck had recently welcomed CBAM, is currently silent.

Responsible EU commissioner left before start of CBAM

In any case, CBAM does not yet seem to have arrived in some European countries. Not even in Germany, the world’s bureaucracy champion, which together with the EC wanted to push the envelope on climate protection. It is just as well that Frans Timmermans, the EU Commissioner formerly responsible for CBAM and the EU Green Deal, has left for the national election campaign in the Netherlands. Presumably knowing about the huge stumbling blocks that this half-baked EU regulation would cause.

Thorsten Gerber, CEO of Gerber Group commented today, “…when total incompetence becomes self-fulfilling!”

EC ignored suggestions for improvement

It’s just as well that the EC ignored all reasonable and de-bureaucratising proposals when it still had the chance. And preferred to give priority to the domestic lobbyists of the steel producers who, as soon as CBAM was launched, started crying about how unfair the CO2 tax would be to them.

But of course there are also positive signals in the market.

US sentiment barometer ISM expected to continue to expand

Analysts at Deutsche Bank believe that the ISM purchasing managers’ index for the service sector, which is expected on Wednesday, should continue to point to expansionary momentum in August 2023. This means that the momentum in the US market could continue to defy the current interest rate level and further boost the economy there.

Source: Steel News