STEEL NEWS

EU steel buyers braced for CBAM price volatility

The European Commission confirmed the plans to broaden CBAM’s scope as part of new plans to support EU producers as the system moves from reporting into full financial enforcement from January 1, 2026.  

The European Commission revealed plans to widen the scope of CBAM before revealing the provisional emissions data central to calculating steel buyers’ emissions-based taxes.

Yesterday’s press conference came just hours ahead of the publication of CBAM’s country-specific default values and free allocation adjustment factors (commonly known as the European benchmarks), both of which are central to determining the final carbon cost faced by importers.  

However, as MEPS continued its analysis of the data, steel market analyst Jon Carruthers-Green highlighted that CBAM taxes will have to be calculated on a case-by-case basis. 

“This release from the Commission covers a wide cross section of information that is key to understanding the effects of CBAM. However, with over 2,000 pages of material published, the market will need time to fully digest and interpret the implications,” Carruthers-Green said. 

“Crucially, the confirmation of benchmarks and default values allows us to better frame the potential price impacts of CBAM and, at the very least, reduce the margin of error in cost estimates. That said, the single most important variable remains the EU ETS carbon price, which will continue to move week by week. This ongoing volatility means a degree of uncertainty will persist for importers and steel buyers attempting to plan and manage their future carbon costs.” 

The value of carbon determined by the EU ETS is currently around EUR84 per tonne. These ETS values, which determine the cost of CBAM certificates used to pay EU importers’ emissions-based taxes, are forecast to rise above EUR120 per tonne between now and 2030.