Tata Steel Europe increases carbon surcharge

Tata Steel Europe is raising its carbon surcharge to €16/t from €12/t for all new contracts, market sources told Argus today.

The mill introduced the initial surcharge on 12 April to help pay for future carbon emissions allowances.

The company emitted 1.98t or carbon for every tonne of crude steel produced in 2019-20, according to its annual report, with the current cost of its emissions close to the €12/t surcharge level. The cost of traded prompt carbon emissions allowances is around €53/t today, according to Argus data, up from around €26/t a year ago, as industrial output recovers from Covid-19 impacts.

Some industry sources expect other European mills to follow suit, although none has officially announced a carbon surcharge yet.

China Steel Taiwan told customers recently it would introduce a surcharge. The firm, which has four blast furnaces, has not announced the level of the surcharge, but referenced European carbon prices rising above €56/t in a note seen by Argus last month.

By Colin Richardson