German tire industry rejects proposed CBAM extension to steel intermediates

Frankfurt, Germany – German tire industry association (ReifenDeutschland) has urged the European Commission not to extend the Carbon Border Adjustment Mechanism (CBAM) to steel intermediate products used in tire manufacturing.

In a 30 June statement, the industry group, which is part of the German rubber industry assocation (WDK), said it supported the overall objectives of CBAM to reduce global emissions and prevent competitive distortions.

However, it argued that any expansion of the regulation should take account of the entire downstream value chain rather than individual intermediate products.

"CBAM can only prevent distortions of competition if it is applied consistently," said Stephan Rau, technical managing director of WDK and head of ReifenDeutschland.

"If only individual intermediate products are covered, while imported finished tires remain unaffected, a new competitive disadvantage arises for European manufacturers – the opposite of CBAM's intended objective."

According to Rau, the European tire industry is already under significant pressure from high energy and labour costs, international overcapacity and growing regulatory requirements.

Extending CBAM to steel intermediate products would further increase production costs in Europe while leaving imported finished tires outside the mechanism, "without effectively preventing carbon leakage," he said.

In its position paper, ReifenDeutschland said any future expansion of CBAM should consider carbon costs and carbon leakage across the entire downstream value chain to ensure a level playing field for European manufacturers.

Before expanding the mechanism to additional downstream products, the group said the EU should first develop, test and implement "a simple, robust and technically workable" system that can be applied consistently across member states.

ReifenDeutschland further urged the EC and German policymakers to establish a permanent working group with affected industries to develop a reliable roadmap for any future CBAM expansion.

It also called for closer coordination between CBAM, the EU Emissions Trading System (ETS) and the Industrial Accelerator Act to avoid overlapping regulatory burdens and strengthen the competitiveness of European manufacturing.