← External Forces: Climate & Resource (all topics)
CBAM - ferro alloys exposure
What it is
The ferro alloys view of the EU carbon border mechanism, in force since Jan 2026. Indian alloys are made largely with coal-based captive power, giving high embedded emissions relative to producers using hydro or nuclear grids
Carbon pricing is also spreading to the UK, Canada and potentially Japan
Impact on industries
- Coal-based captive power - the industry's core cost advantage - becomes the source of its carbon liability, so the strength and the exposure are the same asset
- Competitors on hydro-heavy grids in South Africa and Kazakhstan face lower embedded emissions on identical product
- Renewable captive capacity offers a genuine route to lower embedded emissions while preserving the captive-power advantage
- CBAM raises costs for all carbon-intensive suppliers, so relative position matters more than absolute exposure - and South African supply is declining anyway