Impact of CBAM on carbon emission reduction in global steel foreign trade: projections based on the embodied carbon emission intensity of major countries

The EU devised the Carbon Border Adjustment Mechanism (CBAM), under which carbon tariffs will be applied on select imports of carbon-concentrated goods after 2026 depending on embodied carbon emissions. The EU's steel policy surely affects the global steel trade as it is the largest importer of steel in the world, and to promote the development of carbon-reducing technologies because of their high carbon tariffs. To determine the impact of CBAM on the embodied carbon emissions in global steel trade, use a multi-regional input-output model to calculate the embodied carbon emissions in the trade of major steel producing economies, and then project the embodied carbon emissions intensity of these economies during the period of 2026–2034 by the Bat Algorithm Optimized Extreme Learning Machine based on the decomposed drivers when CBAM is gradually implemented. After the duty-free quota is eliminated in 2034, CBAM can encourage the major steel producing economies to reduce the embodied carbon emissions in the steel exports to the EU by 25.9 million tons and the embodied carbon emissions in the steel exports to the whole world by 625.9 million tons annually, which is a reduction of 31% and 21% comparing with the no-CBAM scenario respectively. Make some recommendations based on the calculations discussed above and the typical analysis of each economy.