Insight

Welcome to the 2024 Janus Perspective, a unique feature that includes a wide cross section of global fastener business leaders. Named after the Roman God 'Janus' – who had the ability to look to the future and to the past, and was often depicted with having two faces – this feature brings together thought leaders from every facet of the industry, from around the world, to give us their retrospective on 2023, as well as prospects and challenges for 2024.

Alexander Kolodzik, secretary general

There is never a dull moment in the fastener industry. As in recent years, the sector is facing many challenges that need to be overcome. In addition to technological innovations, these include geopolitical tensions and compliance requirements for regulating the supply chain – with both gaining momentum. 

Fortunately, it seems that many fastener distributors across Europe have successfully overcome the hurdles that stood in their way in 2023. Certainly not all of them, but the vast majority. However, this has not been easy, nor will it be in 2024.

In this review and outlook, I would like to focus on the hurdles set by the legislator and mention two measures that have kept our industry busy and caused headaches throughout the year. Firstly, there is the ban on the import and purchase of certain iron and steel products from third countries, including fasteners, for the processing of which certain iron and steel products originating in Russia were used, as part of the EU sanctions against Russia. The second is the Carbon Border Adjustment Mechanism (CBAM), which also applies to the import of fasteners.

Even if the EU legislator is pursuing two completely different goals with these two measures, they still have certain parallels, especially for our industry. Because unlike the anti-dumping duties, this specific import ban and CBAM are aimed at imports of fasteners from all over the world into the EU. The breadth of these regulations gives the administrative effort of the import business a new quality for our trading companies. Regardless of its enormous bureaucratic effort, CBAM also has a targeted financial component that will have a significant impact on the European and probably also the international fastener market from 2026. 

Incidentally, both measures do not apply to all goods, but rather apply to a very limited range of goods, including iron and steel products, which includes fasteners. Together with the anti-dumping duties on the import of Chinese iron and steel fasteners that have hit fastener business since 2022, our industry is facing a series of challenges that are noteworthy in this concentrated form.

As internationally operating trading companies, it is part of the professionalism of our member companies to react flexibly to imponderables in order to be able to supply the European economy with fasteners at any time and at any place. These imponderables may be due to changes in the market or ordinary regulations that interfere with free trade. This is normal. What, on the other hand, is not normal and must not be accepted as normal is the emerging practice of the EU legislator to design and implement laws that are lacking the required quality or the necessary lead time so that users can apply them correctly. When it comes to the beforementioned import ban and CBAM, the EU, and certainly many member states, have failed to meet both requirements.

Already in October 2022, a provision was published in the Official Journal of the EU saying that the import ban on goods from third countries should apply from 30^th September 2023. However, until the end it remained unclear how far the ban extended and whether or how appropriate evidence could be provided that the imported goods were not affected by the ban. When in June 2023 the regulation was supplemented with an obligation to provide evidence for importers, it was not clear what kind of evidence was sufficient. Again, it took until mid-July 2023 – 10 weeks before the measures entered into force – for the Commission to provide guidelines saying that a Mill Test Certificate should be considered as sufficient evidence. This created so many uncertainties that a few days after the entry into force of the prohibition, the guidelines were partially revised. None of this would have been necessary if the importers’ voices had been listened to better.

The situation is similar with CBAM, with the regulation of May 2023 containing many vague provisions that require clarification through implementing regulations. Far too much time passed before the Commission’s Implementing Regulation for the transition period was published on 17^th August 2023 – six weeks before the transition period began on 1^st October 2023. 

Even after this, it is still not clear how the requirements should be implemented. The first guidelines did not appear until August. The standard values that importers can initially use appeared only a few days before Christmas. Even at the beginning of 2024, it will not be possible in many EU member states to properly register in the CBAM transition register and enter data – including a deadline with extensive reporting obligations being 31^st January 2024.

In the meantime, the abundance of provisions and the lack of clarity in the requirements have driven the fastener industry in Europe and exporting countries crazy and caused an incredible amount of work. All of this could have been avoided if the deadlines for the entry into force of the reporting requirements, and the mechanism as a whole, had been postponed and time had been taken to make the rules more user-friendly. It is clear that the EU legislature and the EU member states have overreached themselves in the design and implementation of CBAM. They underestimated the scope of the regulations for everyone involved – European importers, manufacturers and suppliers from third countries, as well as the domestic authorities themselves.

EFDA will therefore continue to work with utmost commitment in 2024 to support European fastener distributors in conducting their business in a CBAM compliant manner – so that they can continue to successfully supply the European industry with fasteners. With a series of webinars and other information, we have already informed our members about the current status right from the start – so that they could get prepared in the best way possible. We are also in close contact with representatives of important supplier countries who, too, are hit hard by the EU requirements and have to provide data that very often is simply not available to them.

CBAM will be THE theme for our industry in 2024 and in the years to come. What is certain is that the law needs to be improved in many areas in order to function satisfactorily. We will therefore, within the framework of EFDA, push for meaningful improvements to CBAM – improvements that occur with the necessary quality and the necessary timescale – so that importers can provide their service to the European economy in the appropriate manner and the EU can credibly fulfil its role as a representative of the rule of law in the world.