The construction, plant, and basic materials industries are directly affected by five key factors: material costs, exchange rates, logistics, energy, and environmental regulations
. The global EPC market is expected to see increased demand from the Middle East, India, and Southeast Asia in 2025-2026, but carbon emissions, procurement regulations, and CBAM have emerged as new risks.
FTAs have substantial benefits in reducing material procurement costs, diversifying supply chains, and mutually recognizing standards .
Risk factors | 2025-2026 Outlook | Influence (1~5) | Implications |
|---|---|---|---|
| Steel and cement raw materials | A gradual increase due to increased demand from the Middle East and India. | 4 | Long-term contracts and FTA tariff reductions need to be implemented in parallel. |
| Carbon Border Adjustment (CBAM) | Commercial levies expected in 2026 | 5 | Building emission tracking, LCA, and MRV data |
| EPC order risk | Stabilization of exchange rates and fares | 3 | FTA procurement provisions can be utilized |
| Safety and quality regulations | Strengthening international standards (ISO, EN) | 3 | Simultaneous response to testing and certification |
| Labor and ESG requirements | Strengthening human rights and safety management | 4 | ESG risk management becomes essential |
Tariff reductions on basic materials such as steel, cement, glass, and pipes can reduce EPC project costs by 3-5%
. In FTA procurement chapters (particularly in the UAE and Saudi Arabia), local procurement recognition and easing of qualification requirements are practical benefits.
Item (HS example) | FTA applicability | Major challenges | Management Points |
|---|---|---|---|
| Cement and Clinker (HS2523) | The effect of tariff reduction in RCEP and Korea-UAE CEPA | CBAM·Emission Factor Calculation | Carbon Neutrality Certification and Emissions Unit Management |
| Steel structures (HS7308) | Significant tariff reductions in the US, EU, and Southeast Asia | Origin Complex and SMP Regulations | BOM-based automatic origin management |
| Glass and Stone (HS7005/6802) | The MFN deviation is large and the tariff reduction effect is large. | Quality and Safety Certification | Simultaneous possession of test results, EN, and KS |
| Piping and valves (HS7307) | FTA Origin RVC and Assembly Processes are Important | Mixing of parts origin | Pre-certification of assembly process standards |
The Middle East (especially the UAE and Saudi Arabia) differs significantly in tariff reductions and relaxed procurement regulations based on the Comprehensive Economic Partnership Agreement (CEPA), while the EU strengthens CBAM, ESG, and EN certifications.
ASEAN has seen a significant improvement in streamlining customs clearance and standardization procedures for construction materials.
market | Main items | MFN (trend) | When FTA is applied | non-tariff barriers | Comments |
|---|---|---|---|---|---|
| EU | Cement, steel, and glass | 2~6% | 0% or reduced | CBAM·EN Standard·Emission Reporting | LCA·MRV required |
| UAE | Steel and basic materials | 5~10% | Step-by-step 0% with CEPA | Local procurement and GCC certification | Expanding EPC participation opportunities |
| USA | steel structures and pipes | 0~5% | Low-rate and mutual recognition | ASTM·AISC·Safety Standards | Simultaneous response to procurement and quality |
| ASEAN | Cement, pipes, tiles | Medium rate | RCEP and bilateral reduction | Administrative procedures and standard deviation | Cumulative utilization glass |
Note: Tax rates and requirements vary by HS, purpose, and specifications. Pre-assessment of HS and CBAM compliance data is recommended.
The Carbon Border Adjustment (CBAM) system directly targets steel, cement, etc., and securing
the emissions calculation and reporting (MRV) system and LCA/Environmental Product Declaration (EPD) is essential to maintaining export and procurement qualifications.
System/Issue | Core requirements | Influence (1~5) | react |
|---|---|---|---|
| CBAM | Emissions, LCA submission, and certification | 5 | MRV System and Emission Data Standardization |
| ESG due diligence | Safety, human rights, and environmental risks | 4 | Building a Supply Chain ESG Module |
| green procurement | Environmental Performance/Low Carbon Certification | 4 | Acquired EPD and K-eco labels |
| Waste and Recycling | Strengthening circular economy and EPR | 3 | Utilization of slag and recycled materials |
| Energy efficiency | Process and transportation savings | 3 | Smart Process and Power Mix Improvement |
Korea: Focusing on high-value-added plant design and construction, smart construction, modular construction, and AI-based process management.
UAE and Saudi Arabia: Strengthening Procurement Cooperation Following the Korea-UAE CEPA, Increasing the Share of Local Manufacturing and Construction
ASEAN: Building Materials (Cement, Tiles, and Plumbing) Production Bases + RCEP Accumulation
EU: Establishing an Export Model Focused on Low-Carbon and Circular Materials in Response to CBAM
Integrated policy and public announcement sentiment (α), global EPC order trends (β), and sector sentiment (λ).
Construction, plant, and basic materials are expected to show a gradual improvement due to the effects of the CBAM and CEPA programs .
variable | Δ(%) or exponent | analysis |
|---|---|---|
| ΔExport_now | +2.4 | Driving plant material exports to the Middle East and ASEAN |
| ΔImport_now | +1.2 | Reinforcement of steel and basic materials |
| ΔPrice_now | +0.4 | Passing on the increase in raw material prices |
| ΔSignal_now | +0.028 | Improving ordering sentiment, positive ESG news |
| ΔFTAEffect | +0.32 | Cumulative effects of CEPA and RCEP |
| Forecast_3M | +0.50 | 3-month gradual rise forecast |
Formula (summary): Forecast_3M = 0.5·ΔSignal + 0.3·ΔFTAEffect + 0.2·ΔPrice
field | Suggestion | Executor | Expected effect |
|---|---|---|---|
| CBAM response | Building an integrated MRV/LCA platform | Ministry of Trade, Industry and Energy and Ministry of Environment | Ensuring export sustainability |
| Utilizing CEPA | Korea-UAE Procurement Accreditation Manual and Certification Cooperation | Trade Headquarters | Expanding competitiveness in EPC orders |
| green procurement | Reflection of low-carbon and EPD in public bidding | Public Procurement Service and local governments | Entering the ESG procurement market |
| RCEP·Cumulative | ASEAN local production and parts accumulation within the region | Korea Customs Service and KOTRA | Promoting cost reduction and localization |
| Smart Construction | BIM·AI process management infrastructure | Ministry of Land, Infrastructure and Transport and Construction Association | Simultaneous improvement of efficiency and quality |
The effectiveness of FTAs in construction, plants, and basic materials is a combination of tariff reduction and the ability to respond to CBAM, ESG, and procurement standards .
Forecast_3M: +0.50 — A gentle upward trend due to increased orders from the Middle East and Southeast Asia.
Recommended strategies: ① CBAM·MRV response system ② CEPA procurement linkage ③ Green procurement·EPD expansion ④ RCEP accumulation and smart process optimization.
