R&D Counter
The European Parliament passed the Carbon Border Adjustment Mechanism bill on April 18. The Council of the European Union is likely to give final approval next month to complete the legislation.
The bill is to impose additional tariffs on steel, aluminum, fertilizer, electricity, cement, and hydrogen product exports to the European Union. Starting from October this year, mandatory carbon emissions reporting will be applied to companies exporting those products to the region. The carbon border taxes will be introduced in 2026.
The new law is likely to substantially affect South Korean companies in the industries. Last year, exports from South Korea to the European Union added up to US$7.44 billion, including US$536 million in steel exports and US$55 million in aluminum exports.
South Korean steelmakers are trying to cope with it via R&D. For example, POSCO is working on hydrogen reduction steelmaking, that is, metallurgy based on hydrogen instead of coal. Hyundai Steel is working on electricity-based and carbon-neutral commercial production systems.