The South Korean government has requested the European Union (EU) to consider the feasibility and cost burdens on Korean companies when expanding the scope of the Carbon Border Adjustment Mechanism (CBAM) to include automotive parts and home appliances. It emphasized the need to reflect the contributions of Korean companies in local investments and supply chains during the design of the Industrial Acceleration Act (IAA) and to consistently apply the principle of partner country equivalence in sectors such as automotive, steel, and nuclear power.
The Ministry of Trade, Industry and Energy announced on the 18th that a delegation led by Kim Jang-hee, the Director of New Trade Strategy Support, visited Brussels, Belgium, from the 16th to discuss trade issues with key departments of the EU Commission.
This visit follows a meeting on the 9th between the Minister of Trade and EU Executive Vice President Valdis Dombrovskis. The purpose was to convey the position of Korean companies during the EU's regulatory legislative process and to reduce unreasonable burdens.
The delegation met with the office of the Executive Vice President to discuss the Industrial Acceleration Act, Corporate Sustainability Due Diligence Directive (CSDDD), and the Carbon Border Adjustment Mechanism. Regarding the IAA, they highlighted the contributions of Korean companies to investment, production, employment, and supply chain development within the EU. The aim is to design the system considering cooperation with reliable partners like Korea, which has invested in the EU for a long time.
Additionally, they conveyed the need for the principle of partner country equivalence to be applied predictably and consistently across the entire system, including automotive, steel, and nuclear power.
The government has previously submitted three informal position papers, requesting that the contributions of Korean companies be reflected in the system's design.
On supply chain due diligence regulations, they demanded clearer standards for companies to comply with. The CSDDD stipulates obligations for companies regarding human rights and environmental supply chain due diligence for their own operations, subsidiaries, and business partners.
The delegation requested that the industry's demands be reflected in future guidelines based on the government position paper submitted in July. They also proposed establishing a permanent consultation channel between Korea and the EU to continuously discuss challenges in the interpretation and implementation of the system.
Regarding CBAM, they requested minimizing unnecessary costs and administrative burdens during the processes of third-party verification and the expansion of downstream applications. The EU has been implementing CBAM since January, focusing on basic materials like steel and aluminum, and is considering expanding its scope to downstream products such as automotive parts and home appliances. The government maintains that the complex nature of downstream products should be taken into account.
Cooperation in the digital and critical minerals sectors was also discussed. They reviewed the remaining procedures for the implementation of the Korea-EU Digital Trade Agreement signed in June and discussed follow-up cooperation measures, including electronic signatures. They exchanged views on diversifying critical mineral supply chains and policy coordination among major countries.
Kim Jang-hee stated, "Changes in the EU's industrial, supply chain, and environmental regulations directly impact our companies' economic activities. We will continue to consult to ensure that our companies' positions are adequately reflected in the implementation process of these regulations."
* This article has been translated by AI.
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