The European Steel Association (EUROFER) has stated that the planned launch of the Carbon Border Adjustment Mechanism (CBAM) in 2026 is urgently needed to prevent carbon leakage and support the steel decarbonization investments announced in recent years. EUROFER noted that delaying the mechanism’s implementation or launching it without the necessary improvements would further undermine the competitiveness of the European steel industry.
According to the statement, EU steelmakers have been subject to the EU Emissions Trading System (ETS) since 2005, thus being exposed to a unilateral carbon price that has recently reached around €75/mt carbon. Meanwhile, more than 25 million mt of steel is imported annually from third countries without any carbon cost.
Stating that the mechanism needs to be firm, EUROFER urgently requires major improvements to the current proposal, including: introducing a structural solution to preserve European exports, ensuring they remain competitive globally; implementing stricter rules against circumvention practices, such as resource shuffling; and extending the CBAM’s scope to steel-intensive downstream sectors. “Without these adjustments, the combination of CBAM and the scheduled phase-out of free allocations will fail to provide adequate protection against carbon leakage and, even further incentivize the relocation of production to third countries, affecting both steel and downstream sectors. Most importantly, these changes must be implemented still this year, well before the definitive period starts in 2026,” EUROFER noted.
The association also stated that the administrative burden on operators should be minimized through simpler procedures without the expense of the CBAM’s effectiveness.