Katherine Tai, head of
the Office of the United States Trade Representative (USTR) has sent a letter
to the United States International Trade Commission (USITC) requesting an
investigation and public report to assess the greenhouse gas (GHG) emissions
intensity of steel and aluminum produced in the United States.
The data, says the USTR,
“will help to inform discussions with the European Union (EU) regarding the
Global Arrangement on Sustainable Steel and Aluminum (Global Arrangement).”
A USTR notice announcing
the action states, “The U.S. and the EU have a shared commitment to joint
action and deepened cooperation in the steel and aluminum sectors and are
taking joint steps to defend workers, industries and communities from global
excess capacity and climate change.”
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A recent analysis by
Netherlands-based bank ING of how such a system, sometimes called a carbon
border tax, would play out indicates recycled-content steel and aluminum would
be among the potential winners.
Warehousing and pricing
service the London Metal Exchange (LME) has been pursuing a sustainability
transparency strategy that allows metals producers to report recycled content and
emissions levels in anticipation of a premium being
attached to such metals in the future.
Regarding what Tai and
USTR hope to achieve, the press release continues, “These steps include a
Global Arrangement to discourage trade in emissions-intensive steel and
aluminum products that contribute to global non-market excess capacity from
other countries and to ensure that domestic policies support lowering the GHG
emissions intensity of these industries.”
While neither the
announcement nor the letter to the USITC mention any countries by name,
overcapacity issues often are associated with
production in the People’s Republic of China. Metals producers in both that
nation and India are believed to have GHG emissions levels above the U.S. and
EU averages.
Continues the USTR, “The
U.S. and the EU will be the initial members of the Global Arrangement, and will
invite like-minded economies to participate in the Global Arrangement and
contribute to achieving the goals of restoring market orientation and reducing
trade in emissions-intensive steel and aluminum products. The U.S. and the EU
will seek to conclude the negotiations on the Global Arrangement by October
2023.”