The steel and metal materials industry is a key sector where both the benefits of FTAs and CBAM (Carbon Difference Assessment) responsiveness
have become increasingly crucial due to the global economic slowdown and strengthened carbon regulations. When the EU CBAM is fully implemented in 2026, carbon certification and LCA reporting for steel and aluminum products will become mandatory.
Korean exporters' FTA competitiveness will be assessed based on tariff reductions and the completeness of their carbon data .
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| EU CBAM fully implemented | Direct taxation of steel and aluminum | 5 | Establishing a carbon emissions reporting and LCA system is essential. |
| IRA (USA) | Clean Manufacturing Tax Credit Center | 4 | Opportunities to enter the North American low-carbon steel supply chain |
| China's overproduction | Price and inventory pressures continue | 4 | RCEP and Korea-India CEPA can be reused. |
| Exchange rates and energy costs | mild stabilization | 3 | Effective investment in energy-saving facilities |
| The spread of trade restrictions | Increase in safeguard and AD measures | 4 | Parallel use of HS detailed judgment and FTA |
While steel and metal materials enjoy significant FTA tariff benefits, their product characteristics (coils, sheets, rolled products, etc.) and complex processing stages make determining their country of origin challenging. While
FTA utilization rates average 78-85% , the burden of carbon data and environmental certification costs is increasing.
division | FTA application rate (%) | Major challenges | Management Points |
|---|---|---|---|
| Hot-rolled and cold-rolled steel sheets (HS7208~7212) | 84 | Proof of origin and process refinement | Establishment of a parallel FTA/CBAM reporting system |
| Stainless steel/alloy steel | 80 | Mixing of component materials | BOM-based RVC calculation required |
| Aluminum sheet (HS7606, etc.) | 82 | Environmental certification/LCA requirements | Regeneration rate and power consumption reporting system |
| small and medium-sized manufacturing and small factories | 66 | Data and document staff shortage | Expansion of the cooperative FTA support system |
While tariff reductions through FTAs remain significant, steel faces rapidly expanding non-tariff risks, including safeguards, anti-dumping, and countervailing duties (CBAM) . While tariff-free benefits remain largely intact within FTA agreements, the gap in actual profitability is widening due to carbon and recycling regulations .
market | MFN(%) | FTA application (%) | difference | Major non-tariff barriers | note |
|---|---|---|---|---|---|
| USA | 2.5~25 | 0~2.5 | -2.5~-22.5 | Safeguard/IRA Clean Steel Requirements | North American Carbon Reduction Supply Chain Linkage |
| EU | 3~15 | 0 | -3~-15 | CBAM Direct Application·Ecodesign | Taxation begins in earnest in 2026 |
| china | 5~10 | 0~5 | -5~-10 | Import quotas and industrial protection | RCEP focuses on internal trade |
| India and ASEAN | 10~25 | 0~10 | -10~-25 | Certification and administrative delays | Cumulative use of RCEP and CEPA |
The steel and metal materials industries will be subject to direct EU CBAM taxation starting in 2026, mandating reporting
of product-level carbon emissions (LCA) , electricity mix data , recycling rates , and raw material traceability
. RE100 and green procurement systems will be implemented in parallel, and carbon price competitiveness will determine actual profitability.
policy | applied area | Implementation period | Influence (1~5) | Response strategy |
|---|---|---|---|---|
| EU CBAM | Direct taxation of steel and aluminum | 2026 | 5 | Building an LCA and emissions data platform |
| IRA | North American Clean Manufacturing Tax Credit | 2025 | 4 | Securing a low-carbon raw material supply chain |
| RE100 | Power-based manufacturing plants | Always | 3 | Power conversion for steel mills and rolling mills |
| ESG disclosure | Linkage with forward-looking industries | 2025~2027 | 4 | Preparing for mandatory sustainability management reporting |
Korea: Maintaining a production hub focused on high-grade steel, eco-friendly steel materials, and high-purity aluminum.
EU: Considering Establishing Local Processing and Packaging Plants to Address CBAM
North America: Expanding the IRA Tax Credit Supply Chain (US-Mexico Joint Venture)
ASEAN: Relocation of low- and mid-priced materials and assembly lines based on RCEP
AutoLoop results show that the steel and metal materials industry is showing export growth, centered on eco-friendly steel and lightweight alloys, despite slowing global demand .
The sentiment index (α) of news related to CBAM and expectations for IRA subsidies (β) are positively driving ΔSignal.
variable | Δ(%) | analysis |
|---|---|---|
| ΔExport_now | +2.5 | EU and North American exports continue to expand |
| ΔImport_now | +1.7 | Expanding imports of raw materials and components |
| ΔPrice_now | +0.4 | Rising prices of high-grade steel and aluminum |
| ΔSignal_now | +0.031 | Positive signals based on policy and expectations |
| ΔFTAEffect | +0.34 | Effect of parallel response to tariffs and CBAM |
| Forecast_3M | +0.52 (bullish forecast) | Expected stable upward trend within 3 months |
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| CBAM response | Building an Integrated LCA Platform for Steel and Non-Ferrous Metals | Ministry of Environment and Ministry of Trade, Industry and Energy | Ensuring carbon reliability |
| FTA+ESG linkage | Introduction of an ESG-based country of origin certification system | Korea Customs Service and Ministry of Trade, Industry and Energy | Ensuring data consistency |
| carbon tax offset | Review of export tax credits to address CBAM | Ministry of Strategy and Finance and Ministry of Trade, Industry and Energy | Cost savings |
| Green Finance | RE100-based financial incentives | Policy Finance and Industrial Bank | Investment Promotion |
| technological innovation | Development of hydrogen reduction ironmaking and low-carbon aluminum technologies | Government/private | Maintaining global competitiveness |
FTA competitiveness = moving to a dual axis of tariffs + carbon data.
With the implementation of the EU CBAM, the carbon reliability of steel and aluminum will determine the effectiveness of FTA utilization.
Forecast_3M: +0.52 → Strong demand for eco-friendly steel, with a gradual upward trend centered on North America and the EU.
Future strategic directions:
① CBAM-LCA data standardization
② IRA-based participation in the North American supply chain
③ Expanding the accumulation of RCEP raw materials
④ Establishing an ESG+FTA composite certification system.
