23 February 2022 – Chinese crude steel production strictly limited also in 2022, according to latest reports. Taiwanese stainless steel producers raise prices for March. And EUROFER has serious concerns about CBAM.
China limits crude steel production also in 2022
According to recent reports, Chinese crude steel production will continue to be strictly limited and controlled by the government in 2022. According to market participants, the exact dates and measures are not yet available. However, after apparently more than 140 million tonnes of production in China were already converted to ultra-low emissions in 2021 alone, it seems that they want to build on their success.
Taiwanese stainless producers raise prices
According to market participants, the most important Taiwanese stainless mills will raise their prices for March significantly this week. The main reason given is the scarce availability of nickel and the resulting increase in prices.
CBAM: EU steelmaker concerned about own project
The EU steelmakers are increasingly concerned about the growing momentum of their favourite project CBAM, the European Carbon Border Tax. For it was never the intention of the producers and their association EUROFER to phase out the European Union’s subsidy programme, which is hidden in the free allocation of emission certificates and is worth billions.
Steel lobbyists try to save subsidies
Ever since last year, when it became known that CBAM could only survive before WTO rules if EU ETS subsidies were phased out at the same time, the steel lobbyists have been trying to save what can still be saved from the euro billions.
Eurofer: CBAM must first be tested
Speaking to the media, Axel Eggert, Director General of Eurofer, now says that CBAM would have to be tested before the allocation of free ETS allowances could be stopped. Which, if you do a little research, have always been intentionally much higher in allocation than the real demand of steel producers.
“We’re not against phasing out of free allocations but CBAM has to be tested on its effectiveness first before free allocation is being reduced.”Axel Eggert, director general of Eurofer, the European steel industry association, euractiv.com
EU mills at an advantage: CBAM draft full of loopholes
We agree with Mr. Eggert that a system like CBAM has to be tested first. The effectiveness of CBAM is already doubtful with the loopholes written into the draft law by the EUROFER lobbyists to the advantage of EU mills. However, the European Commission has planned a soft launch of several years for the test.
ETS subsidies to remain until 2035
However, the free ETS allowances are not to be reduced until the hard launch of CBAM in 2026. That is, after the test period. Mr Eggert’s demand that the ETS certificates should only be phased out after the test is thus already fulfilled – but they would like to keep their subsidies in full for the period until 2035.
Green Steel faces geo-political challenges
In view of the current geo-political developments, green steel production faces completely different challenges, at least in the short term. There is no green hydrogen industry in the EU and the transfer medium natural gas will become a bottleneck with sanctions against Russia.
Hydrogen: Germany shifts dirty production to Africa
Germany has already started to relocate hydrogen production to Africa in order to conserve national water reserves and not to pollute its own and nature-protected coasts with millions of tonnes of waste products from the desalination of seawater. How good that dirty “green” hydrogen is not on the CBAM list.
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