The European Union's(EU) major carbon emissions reduction plan, including taxes on imports based on the amount of carbon used to make the product, is expected to adversely affect some industries in South Korea.

According to government and industry sources on Thursday, the country's steel industry is likely to be hardest hit by the EU's carbon border adjustment mechanism(CBAM).

Data from the Korea International Trade Association(KITA) showed that exports of iron and steel to the EU last year stood at one-point-52 billion dollars.

In a report in January, EY Hanyoung Korea said if the EU imposes a tax of 30 dollars and 60 cents per ton in 2023, the domestic steel industry is estimated to pay a total of 142 million dollars in carbon border taxes.

The automobile, aluminum, and fertilizer industries are also likely to be affected. The auto industry's transition into production centered on eco-friendly vehicles is expected gain traction.

The Federation of Korean Industries urged the government to reinforce international coordination to ensure that the new system does not violate world trade regulations and to entreat the EU for recognition of the domestic industry's carbon reduction efforts.