India pushes for easier access to EU's steel scrap, Pg3

Key Highlights:

• India is negotiating with the EU for easier access to steel scrap under their upcoming trade deal to mitigate the impact of the Carbon Border Adjustment Mechanism (CBAM), effective since January 1.
• Indian manufacturers are concerned that CBAM, combined with the EU's recycling policy, is acting as a non-tariff barrier, restricting metal and scrap exports.
• The Indian government plans to increase steel production using steel scrap and electric arc furnace (EAF) technology under the "green steel initiative."
• The government aims to increase the share of scrap in steelmaking to 50% by 2047 to reduce carbon emissions.

Detailed Insights:

• CBAM imposes duties on goods produced in other countries with higher carbon emissions than allowed for EU manufacturers, potentially increasing taxes on Indian metal exports by 20-35%.
• Using electric arc furnace (EAF) routes with scrap can reduce carbon emissions by 1.5 metric tonnes per ton of scrap and cut energy consumption by 75% compared to traditional blast furnace methods.
• Despite benefits, scrap constitutes only 20% of India’s steelmaking feedstock due to limited domestic availability of approximately 25 Million Metric tonnes (MMT) annually.
• India's ferrous scrap imports more than doubled in 2023 compared to 2013, highlighting increasing import dependency amid projected decline in global scrap availability.
• Export restrictions, such as taxes imposed by China and Russia, have reduced global scrap exports, further complicating India's access to quality scrap.

Key Concepts Involved:

• Carbon Border Adjustment Mechanism (CBAM): A carbon tariff on carbon-intensive products imported into the EU.
• Green Steel Initiative: Government plan to ramp up steel production using steel scrap with electric arc furnace technology.
• Non-Tariff Barrier: Trade barriers that restrict imports or exports of goods or services through mechanisms other than simple imposition of tariffs.