The Secretariat's information note titled “Decarbonization standards and the iron and steel sector: how can the WTO support greater coherence?” indicates that more than 20 different standards and initiatives exist to support steel decarbonization efforts or are under development. This may create uncertainty for producers, increase transaction costs, and risk trade frictions. Further work is needed to enhance the alignment of standards, including by finding areas for further convergence on specific measurement methodologies, definitions and performance thresholds for decarbonization, the note states. It is also crucial to ensure that developing countries' perspectives and challenges are considered and addressed.
At the United Nations Climate Change Conference (COP27) held last month in Sharm el-Sheikh, Egypt, Director-General Ngozi Okonjo-Iweala called for greater international cooperation on trade-related climate policies, including decarbonization standards. Achieving global net-zero targets will require consistent and comparable greenhouse gas emissions measurement. However, the proliferation of divergent carbon standards and certifications across countries and sectors risks fragmentation, undermines environmental credibility and creates barriers to trade and investment.
Global stakeholder event
The WTO Secretariat on 9 March 2023 will hold an event titled “Decarbonization Standards for Trade: Promoting coherence and transparency in the steel sector.” The event's focus on the steel sector signals the importance of steel as the essential input in modern life and as one of the most energy- and emission-intensive industries globally, accounting for approximately 8% of annual CO2 emissions.
The 9 March event will bring together WTO members with industry leaders and experts to foster a multi-stakeholder dialogue on how coherent and transparent standards have a crucial role to play in accelerating the global scale-up of low-carbon steelmaking technologies and avoiding trade frictions. Speakers will include stakeholders from the steel sector, academia, international organizations and civil society. The event will be held in person at the WTO in Geneva, Switzerland and livestreamed.
It will build on the Secretariat's analytical work on carbon standards, including in the Trade and Climate Change information note series and the 2022 World Trade Report, which highlights the risk of fragmentation of emerging trade-related climate measures, including carbon pricing and carbon standards.
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