SEOUL– South Korea vowed Monday to extend support to achieve a low-emission production structure in an effort to minimize the impact of envisioned European Union carbon import regulations and to strengthen industry competitiveness.

The EU recently decided to implement the Carbon Border Adjustment Mechanism (CBAM) that calls for levying an import charge on steel, cement, electricity, fertilizer, aluminum and other related items equivalent to their carbon emissions from production.

The scheme will be in full implementation starting in 2026 after a transition period set to begin in October 2023.

The measure is feared to negatively affect South Korea’s steel exporters, in particular, as coal-burning blast furnaces, which cause greater carbon emissions, accounted for nearly 70 percent of the country’s total steel production as of last year.

Steel products are major South Korean export items to Europe, and the country was the fifth largest steel exporting country to the EU market last year after Turkey, Russia, India and Ukraine.

“Amid the full-fledged contraction of major economies, we will find more clear evidence of protectionism in the global restructuring of supply chains,” Finance Minister Choo Kyung-ho said during a meeting of ministers in charge of economic affairs.

Choo added that South Korea will support steel industries that heavily depend on the European market, along with the aluminum sector with high carbon input, to cope with the new EU policy.

During the meeting, the Seoul government decided to extend support for technology development of low-emission production methods, such as carbon capture and storage and hydrogen-using process, according to the industry ministry.

It also decided to expand the basis for measuring, reporting and verifying carbon footprints, and beef up financial support for green projects.

The government earlier pledged to spend 935.2 billion won starting next year through 2030 to develop key carbon-neutral technologies in steel, chemical, cement and other industry fields.

The South Korean government will continue consultations with the European side to ask for its full consideration of the country’s climate policy measures, while urging the EU to have the scheme comply with World Trade Organization rules to prevent it from serving as a trade barrier.

“We will boost communication with private sectors and countries in a similar position on the matter for joint responses,” the industry ministry said in a release.

Source: Yonhap News Agency