Page 18 - bne magazine September 2021_20210901

18 I Companies & Markets bne September 2021
Costs for industry
By 2030, the CBAM could affect imports into the EU of up to €58.3bn, Fitch Ratings said.
For Russia, Fitch noted that higher costs are inevitable. However, the country’s steel and aluminium sectors have low production costs, according to the CRU steel price index, and will be able to absorb higher costs.
NLMK will be most affected by the CBAM because of its significant exports into the EU. Fitch said.
Severstal and Metalloinvest also have sizeable EU exposure, while EVRAZ and MMK will be the least affected.
Aluminium producer Rusal has announced a demerger of its high-carbon assets. It will continue to export into the EU low- carbon aluminium produced using hydropower, thus avoiding material CBAM payments.
In the fertiliser sector, Fitch said northern African and Russian fertiliser producers will be exposed to the CBAM as the largest exporters to the EU.
Russia’s PhosAgro and EuroChem sell just over a quarter, and Morocco’s OCP about 20%, of their production in the EU.
Last chance to cut emissions and save the climate
Richard Lockhart in Edinburgh
The UN has said in its strongest statement yet that human influence is unequivocally responsible for creating climate change, with only immediate, rapid and large- scale reductions in carbon dioxide and other greenhouse emissions able to limit global warming to 1.5°C this century.
Scientists at the UN International Panel on Climate Change (UN IPCC), said in their latest report that the rapid changes in the atmosphere, ocean and biosphere that had occurred were unprecedented over a period of many thousands of years, and that the world was is now seeing the results of human-induced climate change.
Efforts to date to mitigate climate change or reduce emissions
www.bne.eu
Meanwhile, Ukrainian steelmakers need to invest $25bn in order to meet the EU’s new low carbon standards, according to GMK Centre.
Political initiative
Indeed, the whole CBAM issue could prove to be “a diplomatic tightrope,” according to the European Council on Foreign Relations (ECFR), a think-tank.
The EU is taking the global initiative on climate change
by putting in place rules that other countries must follow, although any weaknesses in the CBAM systems and the wider Fit for 55 packages could threaten to undermine Brussel’s climate leadership.
“Diplomatic tact and attention to detail will be critical in preventing the CBAM from undermining the EU,” said Alex Clark, a visiting fellow at the ECFR.
The CBAM is a start, and an innovative one at that, to extend the price of carbon into more areas of industry. While ultimately it will be the consumer that may well have to absorb higher costs, the EU wants a carbon price to simulate investment in greener technology and more vigorous efforts in reducing carbon emissions.
Changing by the artist Alisa Singer
of carbon dioxide have been too little and too late. The UN said that there was now stronger and stronger evidence for human responsibility for increasing global warming, which are directly causing changes in the climate system, such as heatwaves, heavy rainfall, droughts and tropical cyclones.
It warned that these changes are irreversible for centuries to millennia, especially changes to the ocean, ice sheets and global sea levels.
The report shows that emissions of greenhouse gases from human activities are responsible for approximately 1.1°C of warming since 1850-1900, and finds that averaged over the