6 March 2023 – The introduction of the EU Carbon Border Tax CBAM is planned for October 2023. But nothing seems to be ready yet. Not even a final regulation has been decided yet, or a generally applicable calculation key for the calculation of CO2 emissions. FCA investigates LME nickel decision from March 2022 with an enforcement investigation. And will the EU anti-circumvention investigation on stainless steel from Indonesia via Turkey be a slap in the face for EU stainless steel producers?
FCA investigates LME nickel decision from March 2022
The UK’s Financial Conduct Authority (FCA) has announced on its website that it will investigate further the events at the London Metal Exchange (LME) that led to the suspension of trading in nickel contracts on 8 March 2022.
Conduct, systems and controls to be investigated
The FCA enforcement investigation will examine whether there was any misconduct on the part of the LME. In particular, it will look at the LME’s conduct, systems and controls in the period between 1 January and 8 March 2022.
Indications of misconduct must be present
In order to launch an enforcement investigation, the FCA must have sufficient indications of possible serious misconduct.
Whether the prices for nickel on the European Union can still be considered realistic at all, also in view of the latest movements, is therefore a moot point.
Can CBAM even start in October 2023?
The EU Carbon Border Tax CBAM, which is to impose a CO2 price on imports from non-EU countries, is the declared political will of the EC, the member states and also the EU parliamentarians. As early as October 2023, according to the EU will, extensive reporting obligations are to apply to aluminium, fertilisers, steel, stainless steel and cement, for example. Exactly what these will look like or where they will have to be reported has still not been determined. An EU CBAM authority is being planned, but has not yet been implemented.
Basis of calculation still missing
To date, there is not even a binding key for calculating the CO2 emissions that have to be reported when importing into the EU. In addition, in many countries of origin the specific emission data are simply not available. There are also likely to be major difficulties in calculating emissions for the different production routes for steel. This can already be seen in the political decisions of EU member Germany regarding the “traditional” blast furnace route and the dismissal of the EAF secondary route preferred by the EC.
Can CBAM take off in 2023 at all?
All in all, nothing seems to be really ready yet at CBAM. A lot of things seem to have been designed at the last minute and with a hot needle, and the EU bureaucrats are not famous for being able to design something in a particularly user-friendly or fast way – just take a look at the new user interface of the statistics authority EUROSTAT, which is hardly usable or user-friendly since its last update.
Is EU stainless steel producer’s own measure blowing up in its face?
The outcome of the EC’s anti-circumvention investigation into hot-rolled stainless steel (SSHR) from Indonesia via Turkey may have come as a resounding slap in the face to at least one EU stainless steel producer, according to inside information.
After all four major producers had initiated the investigation via EUROFER, the Italian producer Acciai Speciali Terni apparently tried to obtain an exemption for the import of SSHR from Turkey at the end of the investigation. This request seems to have been rejected by the EC with the indication that AST is not an exporting producers in Turkey.
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