Hanoi (VNS/VNA) - To promote steel exports tothe European Union (EU) market, Vietnam's steel manufacturers needto optimise technology, save energy, and carry out product qualitystandards of the EU, according to Do Nam Binh, head of the Minerals andMetallurgy Division at the Department of Industry under the Ministry ofIndustry and Trade (MoIT).

Vietnam has exported steel products to more than 30 markets in theworld, with about 25-30% of its steel exports going to the EU market.

In 2023, Vietnam exported over 2.5 million tonnes of steel to theEU market, nearly doubling from 2022. Since the Free Trade Agreement between Vietnamand the EU (EVFTA) that took effect in August 2020, Vietnam has continuouslyexpanded its market share in the EU, making it one of the main export marketsof Vietnamese steel.

However, from mid-2023, especially this year, Vietnam's steelexport to the EU market has faced many challenges.

Pham Cong Thao, Deputy General Director of the Vietnam SteelCorporation (VNSteel), said that export volume of Vietnamese steel to the EUaccounted for 23% of total exports in 2023. However, from mid-2023, exports tothis market have faced two major barriers, which are safeguard measures and thecarbon border adjustment mechanism (CBAM).

He said CBAM will aim to impose a carbon tax on all goods importedinto EU countries, based on the intensity of greenhouse gas emissions in theproduction process in the host country.

According to CBAM, in phase 1, the manufacturers of steel productsfor export, including Vietnam, must declare their emission levels. In the nextphases, they must have CBAM emission certificates from 2026. Buying thiscertificate will increase production costs, leading to difficulty in pricecompetition. So, businesses must plan to reduce carbon emissions in productionThao said.

To meet CBAM regulations, Binh also said the steelmanufacturers must continue to comply with regulations at the Law onEnvironmental Protection, Decree 06/2022/ND-CP and Decision 01/2022/QD-TTg, theNational Strategy on Climate Change and Vietnam's commitments at COP26.

At the same time, Vietnam needs to have a set of product qualitystandards according to regulations on goods quality management.

Dinh Quoc Thai, Vice Chairman and General Secretary of the Vietnam SteelAssociation, said Vietnam's steel manufacturing enterprises have beenimproving production technology to reduce raw material and energy consumptionto reduce greenhouse gas emissions.

By 2035, they will gradually use green energy such as rooftopenergy and renewable energy for production, as well as gradually applyinga number of new technologies to reduce emissions.

Another barrier is that the EU continues to maintain safeguardmeasures on steel imported into the EU until June 30, 2024. 

To avoid safeguard duties, Vietnam will have to maintain theexport volume at below 3% of the total EU import turnover for each type ofsteel product. If the export volume exceeds the quota, the import tax for theexcess is 25%.

Therefore, the Vietnam Steel Association recommends the Governmenthave policies encouraging steel manufacturers to upgrade production techniquesand technology to reduce energy consumption and carbon emissions. 

It also proposes that the Government continue to supportbusinesses by issuing trade remedy measures on the domestic market to limitcheap and poor-quality steel.

According to the association, the steel industry is likely torecover slightly in 2024 with an increase of 7% to 21.7 million tonnes in steelconsumption and nearly 29 million tonnes in steel production./.