European Commission launches public consultation on CBAM extension to downstream products
The European Commission launched a public consultation on a possible extension of the Carbon Border Adjustment Mechanism (CBAM) to include specific downstream products. This consultation is a key step in evaluating the mechanism’s next phase and is highly relevant for all actors across the steel and metals value chain.
Why this matters?
The current CBAM regulation covers basic materials such as steel, aluminium, cement, electricity, and fertilizers. However, to prevent carbon leakage further down the value chain, the Commission is now exploring whether CBAM should also apply to downstream products — goods that are manufactured using CBAM-covered inputs, such as processed steel components, machinery, or fabricated aluminium items.
This follows a clear signal from the European Steel and Metals Action Plan, which called for the inclusion of steel- and aluminium-intensive downstream goods to protect the EU’s industrial base and climate objectives.
What’s at stake?
EUROMETAL encourages its member companies and national federations to participate in this consultation and share concrete feedback on how an extended CBAM might affect supply chains, trade patterns, compliance costs, and competitiveness in the steel distribution and service centre sectors.
Deadline for feedback: 26 August 2025
How to participate?
You can submit your contribution directly on the European Commission’s portal. More information about this consultation can be found here:
European coil market to remain subdued over summer
The European coil market is showing no signs of recovery, remaining subdued with weak demand and limited pricing momentum on the domestic and import markets, sources told Kallanish on the sidelines of last week’s EUROMETAL 75th Anniversary conference held in Luxembourg.
While import prices appear to have reached a floor following a sharp decline, particularly low levels are still obtainable from Asian suppliers for large-volume orders of 50,000-tonne vessels. Nevertheless, buyers remain cautious, purchasing only when pricing is attractive.
Two mill sources in southern and northern Europe confirm the continued market weakness, noting that lead times remain short. No significant improvements are anticipated in the short term, while transactions are expected to be limited this month and focused on small tonnages.
Prices for downstream products, including tubes and sheet, particularly in Italy, are also on a declining trend. Market participants do not foresee any substantial improvement in coil or derivative sales in July ahead of the traditional August production stoppages.
In Spain, there is more optimism. A local steel processor reports solid results in June, with prices approximately €20/tonne ($23/t) higher than in Italy. Orders from the automotive sector are also holding up better than in the Italian market, suggesting a stronger demand environment.
In Italy, France, Spain, Belgium, Luxembourg and Germany, service centres are adopting a selective purchasing approach, sourcing both within and outside the EU.
Current Asia-origin hot rolled coil import transaction values range between €460-490/t cfr Italy, depending on origin and volume. Domestic base prices are reported in the range of €530-550/t delivered, with the low end seen in southern Europe.
Two German sources report bids dipping below €540/t base in their market. Many agree that European coil prices are likely to continue a slight downward trend until the end of the summer holiday period.
In Italy, Turkish-origin HRC offers are currently reported at €470/t cfr excluding duty, and between €485-490/t including duty. Indonesian-origin HRC is traded at €460-470/t cfr, while Indian-origin suppliers and other Asian countries are quoting slightly higher, at €500-510/t cfr.
Any new import orders from Asia are expected to be impacted by the upcoming Carbon Border Adjustment Mechanism (CBAM), adding further uncertainty to the import market.
An Italian service centre reports that companies are now incurring losses and facing challenges in securing insurance coverage, even for large customers.
The implementation of CBAM is expected to have a severe impact on service centre and re-roller margins as, from July onwards, importing at competitive prices will become increasingly difficult.
Additionally, the euro-dollar exchange rate remains unfavourable for buyers and is expected to deteriorate further, compounding pressure on margins.
According to Marcegaglia ceo Antonio Marcegaglia, flat steel prices are expected to reach their lowest point this summer before starting to recover in the fourth quarter. This will be driven by the European Commission’s safeguard measures review, existing quota systems, and CBAM.
Natalia Capra France
European green steel premiums slide in recent deals; demand remains limited
Green steel premiums in Europe declined in recent deals, as willingness to pay for decarbonized material remained low amid broader market challenges, sources told Fastmarkets on Thursday July 3.
Overall, demand for steel produced with reduced carbon emissions content was said to have been muted across Europe this past week.
Therefore, sources said that steelmakers were more flexible in prices, especially when larger volumes were on the table.
Fastmarkets’ methodology defines European green flat steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.”
European mills were offering premiums for such steel at a minimum of €200 ($235.33) per tonne, with some suppliers aiming for €250-300 per tonne. However, actual tradable values were lower.
“There are a lot of ‘useless’ inquiries — buyers come for test batches, looking to buy one coil or a very small amount. For those, mills give firm, high offers of €200 per tonne and up. For real buyers and large volumes, deals can be sealed at €100–130 per tonne,” a buyer source told Fastmarkets.
Transaction for sizeable tonnages were reported at €130 per tonne.
Bookings were heard done at €150-180 per tonne.
Buyers estimated tradable values for green flats at €100-170 per tonne.
Mill sources gave higher estimations of €150-200 per tonne.
Sources reported that buying interest for green flats was coming mainly from the automotive and white goods sectors.
As a result, Fastmarkets’ assessment for the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €130-180 per tonne on Thursday July 3, down by €20 per tonne from €150-200 per tonne seven days earlier.
Continued limited demand for green steel in Europe was explained by poor market fundamentals, sources said.
“We have other problems than green steel now — Trump tariffs, imports, shrinking consumption, high costs [of steelmaking],” a trading source in Europe told Fastmarkets.
CBAM developments
On Wednesday July 2, the European Commission launched a public consultation on the Carbon Border Adjustment Mechanism (CBAM), aiming to refine the framework and close potential loopholes.
The consultation is open until August 26 and focuses on several key areas:
- Expanding the CBAM scope to downstream products — to cover a broader range of goods and mitigate the risk of carbon leakage further along the supply chain.
- Addressing circumvention tactics — targeting strategies used to evade CBAM obligations, such as reclassifying products or shifting production to third countries.
- Improving the treatment of imported electricity — assessing ways to better calculate emissions linked to imported electricity, particularly to more accurately reflect decarbonization efforts in exporting countries.
CBAM will formally enter into force on January 1, but its fiscal impact will only start in May 2027, Fastmarkets reported.
During the first year of CBAM implementation (2026), importers will be required to pay for just 2.5% of embedded emissions. This proportion will gradually increase, reaching 100% of emissions by 2034.
As a result, the costs associated with importing goods will rise significantly next year, and buyers are advised to begin preparing now.
Additional charges will apply to higher-emission imported steel, estimated at approximately €56 per tonne.
“Assuming this benchmark and imported steel with embedded CO2 emissions of 2.1 tonnes and a current EUA price of €76, CBAM is estimated to cost an additional €56 per tonne of steel,” Julian Verden, Managing Director Europe at Stemcor, said at the EUROMETAL 75th Anniversary event attended by Fastmarkets on Thursday.
