Tata Steel Europe announced that in order to make up for the rising cost of carbon emission allowances, a carbon surcharge of 12 euros/ton will be added. This policy will apply to all new steel sales contracts in Europe and the United Kingdom. According to the company’s statement, this move is in line with Tata Steel’s carbon emission strategy, which aims to achieve carbon emission reductions of 30%-40% by 2030 and carbon neutrality by 2050.
Faced with the increasing shortage of carbon emission rights and rising prices, it is necessary for steel companies to take measures to cope with rising costs. In order to ensure the sustainable development of the steel industry in the European Union and the United Kingdom in the future, Tata Steel Europe believes that these increased costs need to be passed on, and the carbon dioxide surcharge is one of the publicly influential factors in pricing. Other major European steel companies are expected to follow suit. Industry insiders predict that the transition to non-fossil steel production will lead to a 35%-100% increase in the price of non-fossil steel. As a result, the new pricing policy of European steel companies will add additional costs to steel consumers.
The European Union ETS (EU ETS) is the world’s first trading system aimed at reducing greenhouse gas emissions in energy-intensive industries. Since the beginning of this year, the free quota has been further reduced and the purchase price has continued to rise. The UK is launching the UK ETS (UK ETS), which is based on principles similar to the EU ETS. Currently, the market price of carbon emissions is 45 Euros/ton, which is higher than 21 Euros/ton a year ago.