International Steel Mills
Tata Steel Europe Rolls Out a Carbon Surcharge
Written by David Schollaert
May 4, 2021
Tata Steel Europe confirmed that it’s implementing a carbon surcharge on all new steel across Europe, effective July 2021. This new initiative by the India-based steelmaker will essentially pass on the cost of carbon emissions allowances to the buyer.
“We recognise the challenges of climate change,” said a Tata Steel Europe spokesperson. “Tata Steel’s strategy is to build the leading European steel business, which is sustainable in every sense.”
The company’s commitment to carbon neutrality, sustainability and reducing greenhouse gas emissions calls for adaptive technologies, and thus higher costs. The surcharge will likely be fixed at €12.00 ($14.48) per ton of steel; however, contract negotiations are currently underway, the spokesperson noted. Introduction of the carbon surcharge comes as emissions allowance costs have nearly tripled over the past 12 months, according to the European Union Emissions Trading System.
“To become CO2-neutral, we are taking action in both the Netherlands and the UK to achieve these ambitions. However, we are now creating a greater awareness of the cost of carbon by introducing a CO2 surcharge on our products,” the spokesperson added. “Increasing shortages and rising prices of emission rights means there is a need for steelmakers to deal with growing costs in production. In order to ensure a sustainable EU- and UK-based steel industry for the future, we need to pass these costs on.”
Similar to other global steelmakers, Tata Steel is pledging to reduce its own carbon emissions by 40% by 2030, and to net-zero by 2050. Thus, the implementation of a carbon surcharge will help the company buy the future carbon emissions allowances it requires to offset the growing costs in production, while also making progress towards its sustainability goals.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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