Japan and South Korea have announced they will cooperate in consultations with the European Union (EU) regarding the European Cross-Border Carbon Adjustment Mechanism (CBAM) for steel and other products.
The relevant ministries of the two countries held a steel dialogue in South Korea last week, where they discussed the CBAM.
Both Japan and South Korea are committed to working together in response to the uncertainties associated with the European CBAM mechanism.
A key issue is the confusion surrounding the CBAM reporting system, which requires detailed data on carbon emissions from steel exports to the EU. The lack of clarity on future requirements is causing confusion for both exporters and steelmakers.
Japan and South Korea will cooperate in consultations with the EU to resolve these issues around the CBAM reporting system.
There are also concerns that the CBAM reporting system may contradict World Trade Organization (WTO) rules, and the countries agreed to cooperate by exchanging information on how CBAM affects their steel industries.
In addition, the countries decided to increase coordination in developing carbon reduction technologies, securing raw materials like scrap and green hydrogen, and setting international standards for low-carbon steel.
A further meeting on green steel is scheduled for the second half of this year.
As reported by GMK, the introduction of CBAM is prompting other countries to develop their own border carbon charges, while some are considering retaliatory measures.
Analysts believe Japan, Singapore, and South Korea are the most likely supporters of the European CBAM mechanism.
