Panels, Cbam alarm. Costs up by 10%
From 1 January, tariffs will also be imposed on urea. Fantoni (Assopannelli): 'The rule hits Italian producers and benefits non-European ones'
Key points
Increases of about 10% in production costs that will inevitably fall on sales prices to corporate customers and end consumers. The European panel industry, like that of agriculture, is alarmed by the entry into force, as of next 1 January, of the Cbam (Carbon Border Adjustment Mechanism), i.e., the EU regulation that introduces a tax on imports of raw materials and semi-finished products that generate high quantities of CO2 in order to be produced. These include urea, a natural gas derivative used mainly in agriculture as a fertiliser (85%), but also in industry as a base for the production of glues.
Objectives and risks of the measure
We speak of this regulation especially with reference to sectors such as steel, aluminium or cement, since it was created with the aim of protecting European production, which is subject to stringent decarbonisation rules, by also incentivising non-European producers to increase the use of renewable sources or at least realigning competitiveness on the price front. The problem is that a regulation created for reasons and with shared objectives risks undermining precisely that competitiveness that it would like to protect, at least as far as certain sectors are concerned, including precisely that of wood panels intended for the production of furniture, above all, and for the building industry, which require large quantities of urea to make the resins needed to produce the panels themselves.
'While this legislation may indeed have a protective purpose for producers of raw materials for which there are important industries in Europe, such as steel, aluminium and cement, in the case of urea it becomes a boomerang, because after the gas crisis of 2022, production of this product in Europe almost disappeared,' explains Paolo Fantoni, president of Assopannelli.
European competitiveness at risk
Today, European urea production capacity barely covers 20% of the needs of the industrial sectors that use it, and production currently stands at 10%. The result is that "these cost increases will translate into reduced competitiveness of European manufactured goods whose production requires importing from non-EU countries the raw materials and semi-finished products on which the Cbam is applied," Fantoni adds. So much so that the European panel associations had made a request to the EU Commission not to apply this rule on urea for industrial use since, unlike urea used as a fertiliser, the CO2 is not then dispersed in the environment, but stored in the products themselves, but Brussels rejected the proposal.
"This is yet another measure that puts us in difficulty, as a country and as Europe, in the face of our non-European competitors,' Paolo Fantoni observes. 'In fact, the Cbam only concerns raw materials and semi-finished products, but not finished products. Therefore, manufactured products that, although using urea, are made in non-EU countries will not be affected by this levy and, consequently, will be able to enter Europe without carrying these burdens that make European industry less and less competitive'.
