Discussions focus on protection against imports and global overcapacity
Discussions about the future of the U.S. steel industry and green steel are dominated by the industry's long-standing struggle to protect itself from imports and global overcapacity. E&E News writes about this.
Therefore, steel companies support the adoption of the Leveling the Playing Field 2.0 Law. This bipartisan bill would allow the Department of Commerce to impose tariffs on governments that subsidize companies in third countries. Currently, this document is stuck in both houses of Congress.
According to the American Iron and Steel Institute (AISI), in 2023, the United States produced 89.7 million tons of steel and imported 28.2 million tons. Foreign supply represents more than a fifth of steel consumption in the United States. China and India directly export only a small amount of steel products to the US market, but representatives of the steel industry note that Mexico is the main transshipment center for foreign steel.
The US and EU are currently negotiating a green steel club. At the end of last year, the parties resumed the mutual suspension of tariffs imposed during the Trump administration. However, some observers say the discussions, initially aimed at establishing a global standard for trading in low-emission steel, are unlikely to produce significant results due to ongoing disagreements.
Inu Manak, a trade policy researcher at the Council on Foreign Relations, noted that the Biden administration prioritizes market access for U.S. companies over increasing trade in low-carbon steel.
«If we look at the American and European steel industries, they are already quite green. But they could be more decarbonized,” she said.
Currently, American lawmakers are uniting behind a law called the PROVE IT Act. It was approved by the Senate Environment and Public Works Committee in January of this year. The bill requires the Department of Energy to study and determine the emissions intensity of nearly two dozen products made in the United States, including steel, compared to products made in other countries.
Some conservative groups have criticized it as a launching pad for a carbon tax, although experts say it aims to limit imports from China and India.
US steel producers support this approach.
“Countries and companies that produce dirty, high-emission steel should pay a premium if they cannot reach the emissions levels of national steel producers. There should be a surcharge, and things like the PROVE IT Act will help set the stage for that,” said Philip Bell, president of the American Steel Manufacturers Association (SMA).
The future of the PROVE IT Act is uncertain, but its supporters hope the bill will grow in popularity even if Donald Trump wins the next US presidential election. This is because it will be in line with Trump's protectionist stance and his tough trade stance towards China.
As the GMK Center previously reported, groups representing U.S. steel producers have called for legislation in 2024 to support domestic demand and limit imports of carbon-intensive steel from countries like China.
