Options and Priorities for the EU-U.S. Global Arrangement on Sustainable Steel and Aluminium

Author(s): Andrei Marcu, Michael Mehling, Aaron Cosbey, Sara Svensson

Following the announcement of the EU-US Global Arrangement on Steel and Aluminium on 31 October 2021 and the recent developments in negotiations this report will look at the agreement and explore a viable path forward for that agreement and the role in that path of the CBAM.

Building on previous work conducted ahead of the adoption of the CBAM Regulation with Phases I (2019-2020), II (2020- 2021) and III (2021-2022) of its project “Border Carbon Adjustments in the EU”, the European Roundtable on Climate Change and Sustainable Transition (ERCST) has extended its analysis of the evolving CBAM into a fourth phase, providing decision makers and stakeholders with a better understanding of critical issues as the CBAM proceeds from adoption to implementation.

Phase IV of the ERCST project is intended to provide in-depth analysis of the implementation phase of the CBAM as it progresses to its full operationalization and provide a broader view of related developments in the climate and trade area. The present report is the last in a series of four reports that together form the fourth phase of the “Carbon Border Adjustment in the EU” project.

The initial report covered the role of the CBAM in a portfolio of measures for industrial decarbonization. The second report looked at the draft Implementing Regulation for emissions reporting during the transitional period including methods for calculating emissions. The third report looked at methods to credit foreign carbon pricing under the CBAM. This report, the fourth in Phase IV, looks at the issues faced in the transatlantic negotiations on cooperation in the area of sustainable steel and aluminium.

This report provides the background of the GSA; an explanation of the different approaches and how it fits into the CBAM; and looks how to broaden the participation in the GSA globally.