16 November 2023 – A huge total economic loss of more than 10 billion euros per year is likely to be incurred by EU industry due to incorrect assumptions made by the European Commission when developing the CO2 border adjustment tax CBAM. And the US steel industry is preparing for a strong start in 2024.
- CBAM: More than 10 billion euros in losses for EU industry per year?
- US steel market prepares for a strong start in 2024
CBAM: More than 10 billion euros in losses for EU industry per year?
The data is becoming increasingly clear that the European Commission has miscalculated once again. And not just by a few euros or so that it could simply be made to disappear, as with the extension of the safeguard measure in 2021.
The EC’s Impact Assessment Report from July 2021 assumes that only 1,000 importing companies within the EU and just 500 installations outside the EU would be affected by CBAM.
EC was repeatedly made aware of CBAM errors
The Gerber Group had repeatedly pointed out to those responsible for CBAM at the responsible authority DG TAXUD and also to Commission President Ursula von der Leyen that the EC had made a huge miscalculation here and that the assumption of just 1,000 affected companies was simply wrong and far too low. And also provided evidence of this.
EC Impact Assessment: burden on SMEs unreasonably high
The calculation method now chosen for CO2 emissions also places an excessive burden on small and medium-sized enterprises (SMEs) in the EU in particular. This is also stated in the EC’s Impact Assessment Report. And that is with up to 44,000 to 45,000 euros per year per company, depending on the estimate, without taking into account the costs for CO2 certificates. The Gerber Group had also pointed this out several times to the Commission and DG TAXUD. It is hardly surprising that Brussels refused to listen.
20 to 50 thousand companies affected in Germany alone?
According to current estimates by the consulting firm Deloitte, at least 20,000 companies in Germany alone are directly affected by the CBAM measure. We were able to find out that German authorities even assume that up to 50,000 companies in Germany ONLY are likely to be directly affected by CBAM.
We have made a simplified extrapolation of this:
|EU companies affected by CBAM||Costs per company per year (EUR)||Total costs In millions of EUR|
|Germany only (population 84,4 million)||50,000||45,000||2,250|
|Extrapolated EU (based on population, 450 million)||267,180||45,000||12,023|
|Estimated revenue CBAM 2028 (EC)||1,500|
|Overall economic damage EU per year||10,523|
Damage of more than EUR 10.5 billion for the EU economy
In the worst case scenario, the CO2 border adjustment tax would cause overall economic damage of more than EUR 10 billion per year. This is because the Commission appears to have assumed the import volumes at least halfway correctly.
Thorsten Gerber, CEO of the Gerber Group, said today: “The EU member states, above all Germany and the German government, must now act immediately and put an end to this outrageous and irresponsible blunder by the Commission. The Commission did not want to listen to SMEs. But they must respond to the member states.”
“A similar deafness is also becoming apparent in the ongoing anti-circumvention proceedings against cold-rolled stainless steel, whereby Brussels is currently going one step further and arguing very questionably against some submissions. So has the regulation been dictated to them again and do they just have to push it through once more?” continued the entrepreneur Thorsten Gerber critically.
US steel market prepares for a strong start in 2024
According to media reports, US steel manufacturers are expecting a strong start to 2024. Now that strikes at US car manufacturers have been resolved more quickly than expected, many suppliers and service centers are apparently facing empty warehouses and need to ensure supplies quickly. This has also recently caused prices for HRC in the United States to shoot up significantly.
This could be an important indication for all those who have not yet started to replenish their stocks with steel, stainless steel and aluminum in order to be able to meet the coming demand.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.