Indian steel exports at high risk from Europe’s new carbon tax: Goldman Sachs


Steel producers in India are most at risk from Europe’s new carbon tax on imports due to their high sales to the region and mills’ elevated emissions intensity, according to Goldman Sachs Group Inc.

Steel is traditionally among the most polluting industries.(MINT_PRINT)

There is a potential for an additional $102 to $190 a ton of tax charges on flows of Indian steel to the bloc over the next decade, analysts led by Emma Jones said in a report. That range — which assumes a carbon price of $70 — is 15% to 28% of current hot-rolled coil prices, they said.

Discover the thrill of cricket like never before, exclusively on HT. Explore now!

ALSO READ- Tata Steel Q3 results: Company reports consolidated profit of 522 cr; revenue declines 3%

Policymakers worldwide are seeking to reduce carbon emissions in their fight against climate change, with steel traditionally among the most polluting industries. Europe’s Carbon Border Adjustment Mechanism aims to subject imported goods such as steel to a levy to ensure its own strengthened pollution standards aren’t undermined by trading partners.

The idea has already triggered a hostile reaction from overseas producers, including in Russia and China. Indian mills have been among the most vocal about the potential impact of the tax, dubbing it a “trade barrier,” and New Delhi has been in discussions with the EU for concessions.

PREMIUM READ: A new way to clean up the steel industry

“Indian steel producers operate at a carbon intensity level well above the EU and global level, potentially exposing them to elevated charges,” as they rely mainly on coal-based processes, the analysts said. Among producers, Tata Steel Ltd. and JSW Steel Ltd. have the most direct exposure to the region, Goldman said, highlighting risks of weaker margins or lower sales.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it’s all here, just a click away!- Login Now!
Stay informed on Business Newsalong withGold Rates Today, India News and other related updates on Hindustan Times Website and APPs



Source link