An Australian carbon border adjustment tax may expose BlueScope Steel to more competition from lower-carbon steel imports from Malaysia and Taiwan, and Transurban to increased concrete costs, according to new research by UBS.

The proposed carbon border adjustment mechanism highlights a glaring missed opportunity under the Albanese government’s signature climate policy, the safeguard mechanism. UBS says the government has set such a lenient “steel industry average” – or benchmark carbon intensity – that it will raise negligible revenue and leave returns at BlueScope’s $1.15 billion blast furnace reline at Port Kembla exposed to increased scrutiny.