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32 I Cover story bne July 2021
As such, the playing field for Russian exporters seems to be sloping towards them as they lose any competitive advantage with EU producers, which must pay for carbon through the EU ETS.
Ukraine
Meanwhile, Ukraine has put in place
a carbon tax, although at just UAH10.0 ($0.40) per tonne it is derisory and is one of the lowest in the world.
Ukraine has a 2050 Green Energy Transition Concept, which aims to meet the objectives of the European Green Deal. However, it admits that the country could only become climate neutral by 2070.
The country’s GDP to energy and carbon consumption ratios are still extremely high compared with not only those of OECD members (three times greater) but also neighbouring Eastern European countries, the concept says.
Turkey
For Turkey, iron, steel and cement production could be affected, with the CBAM costing Turkey’s manufacturing sector an additional €1.08bn per year, according to the Turkish Industry and Business Association (TUSIAD).
The country currently does not have a carbon price, although there are voluntary schemes.
However, a recent briefing from the European Council on Foreign Relations highlighted how the Green Deal could foster better relations between Brussels and Ankara.
Relations could improve if the EU helps Turkey to adjust to the European Green Deal and the climate challenge more broadly.
The briefing highlighted how the EU and Turkey are at different levels of
preparedness for the transition away from a carbon-based economy. Yet
a new agreement on climate change could develop a better framework of rules governing relations between the two while also maintaining Turkish industry’s competitive advantage in the European marketplace.
Steel
The threat of carbon prices is spurring corporations to invest in green production, such as using green hydrogen as a fuel to manufacture steel, or green ammonia to produce fertiliser.
Green here means using electricity from solar and wind to power new methods of production, such as electrolysis for hydrogen, rather than more traditional sources of power such as fossil fuels.
One option to avoiding paying for carbon credits is to use green fuel such as hydrogen.
Rail mill, EVRAZ NTMK Photo: www.evraz.com
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