Mediaroom

European Commission President von der Leyen and United States President Biden have agreed to start discussions on a Global Arrangement on Sustainable Steel and Aluminium to achieve the decarbonisation of the global steel and aluminium industries. 

The two Presidents have also agreed to pause the bilateral World Trade Organization disputes on steel and aluminium. Following the United States’ announcement that they will remove Section 232 tariffs on EU steel and aluminium exports up to past trade volumes, the European Union will take the steps to suspend its rebalancing measures against the United States. 

The Global Arrangement will seek to ensure the long-term viability of these industries, encourage low-carbon intensity steel and aluminium production and trade, and restore market-oriented conditions. The arrangement will be open to all like-minded partners to join. 

What’s in for automotive? 

Europe’s automotive sector is responsible for respectively 16% and 36% of the demand for EU manufacturers steel and aluminium, supporting tens of thousands of jobs in both industries. Automotive suppliers are committed to achieve a climate neutral manufacturing footprint and will therefore require access to decarbonised steel and aluminium. Cooperation between the EU and US could help facilitate the transition and simultaneously address the risks connected to unilateral EU initiatives such as the Carbon Border Adjustment mechanism.   

The current proposal for a Carbon Border Adjustment Mechanism (CBAM) recently proposed by the European Commission is insufficient to limit the negative impact of an increasing CO2 price on the competitiveness of European industry. CLEPA has raised the unknown impact on downstream users of steel and aluminium and called for a comprehensive green, industrial policy to help automotive suppliers realise a carbon neutral manufacturing footprint without loss of global competitiveness.