Day: 18 April 2026

The European Commission has announced that it has approved a €3.8 billion state aid scheme for Germany aimed at supporting energy-intensive industries through temporary electricity price relief.

The measures fall under the Clean Industrial Deal State Aid Framework and are designed to address rising energy costs while supporting decarbonization.

Focus on competitiveness and carbon transition

The scheme targets industries exposed to international competition and at risk of relocation due to high electricity prices.

In addition to providing cost relief, beneficiary companies are required to reinvest a significant portion of the aid into climate-friendly technologies such as electrification and energy efficiency improvements.

The support program will run from January 2026 to December 2028. Companies will apply for compensation annually, based on actual electricity consumption and wholesale price levels.

The European Commission stated that the scheme is necessary, appropriate, and proportionate, as it addresses both competitiveness concerns and climate objectives. By combining cost relief with mandatory green investment, the framework aims to strengthen industrial resilience while advancing the transition toward net-zero emissions.

Steel sector raises concerns over effectiveness

Following the approval, German Steel Federation (WV Stahl) CEO Kerstin Maria Rippel stated that while the decision is a positive step, the framework’s current design limits its effectiveness for energy-intensive sectors such as steel.

According to Rippel, the mechanism applies only to a portion of electricity consumption and cannot be combined with existing carbon electricity price compensation schemes.

Calls for more flexible state aid rules

Industry stakeholders have called for adjustments to EU state aid rules, particularly under the proposed Temporary Iran Crisis Energy Framework, which is expected to provide greater flexibility. The German steel sector has urged the government to actively support these changes at the EU level.

In this context, WV Stahl continues to advocate for a reliable electricity price of €50/MWh, including all associated costs such as network charges, taxes, and levies. Such a benchmark is seen as critical to maintaining international competitiveness while enabling the transition toward climate-neutral steel production.

European carbon prices traded under the ETS scheme are expected to quickly rise to up to €185/tonne ($218/t) in 2035, according to BloombergNEF estimates.

As allowances are reduced, the EU ETS price is set to increase from €75/t in the first quarter to an average of €86/t for full-year 2026 and €142/t in 2031, BloombergNEF analysts said in a webinar on Thursday attended by Kallanish.

Brussels must tighten the number of emissions allowances available in the bloc’s carbon market to see meaningful emission reductions in hard-to-abate industries, suggested Allen Abraham, head of sustainable materials at BNEF.

“The EU is trying to reduce the amount of free allocated emission allowances to various sectors, especially those covered by CBAM today, like steel, cement and aluminium,” he explained. “And that means the carbon exposure for these CBAM-covered goods is going to increase substantially, and the carbon prices in the EU ETS are also expected to rise substantially this year.”

Iron and steel accounted for 70% of the imported goods covered by the Carbon Border Adjustment Mechanism (CBAM) in 2024, by volume and value, BNEF estimates. The largest exporters of CBAM-covered iron and steel were mainland China, Turkey, India and the UK.

While clarity is still needed on calculating costs, Abraham warned that the default values proposed by the European Commission could distort competitiveness between markets. That is because these default emissions obligations are set at conservative levels, and in certain cases, much higher than actual emissions, noted Brynne Merkley, European energy transitions associate at BNEF.

The move is intended to force companies to verify the embedded emissions of the goods with EU-accredited institutions. The analysts said the default values are “highly punitive for most products”.

For hot-rolled steel imports, for example, BNEF projects a default CBAM cost increase of nearly 30% for mainland Chinese material and 33% for Russian material. India could see an increased cost of 45%, while Canada and Brazil benefit from low costs and increases of around 4% and 6%, respectively. Imports from South Korea, Turkey and Ukraine could see rises of up to 20%.

“The default obligation can quickly rise close to as high as €500/t by 2030, so that is as high as the cost of the product itself, in some cases now,” commented Abraham. “So, verifying your actual emissions, declaring them and then getting them approved by bodies that are already acknowledged by the EU is extremely important to ensure that companies can remain competitive in the European market.”

Author: Gabriela Farhangi 

kallanish.com

Processing industry sounds alarm
On April 14, EUROMETAL, the European Federation of steel distributors, traders and service centres, launched a “call to action to safeguard the European steel and metals industry,” already supported by more than 360 signatories across the entire steel and metals sector, including national federations, distributors and steelmakers.

During the press conference, attended by Fastmarkets, EUROMETAL outlined key demands to safeguard the industry, warning of accelerating deindustrialization.
• Trade defense: Introduction of tariffs and quotas on steel derivatives to align with US and Canadian measures and to counter unfair imports.
• Carbon Border Adjustment Mechanism (CBAM) expansion: A similar move for CBAM – extension of the mechanism to downstream products to prevent carbon leakage and relocation.
• ”Made in EU” rules: Priority for EU-produced goods in public procurement and funding, to support domestic industry.
• Cost relief: Reduction of industrial power prices to 5 cents per kWh, revision of the EU’s Emissions Trading System rules, and cuts to the regulatory burden.

The need to act quickly was highlighted by Alexander Julius, president of EUROMETAL; Marcus Fix, managing director of service centre DM-Stahl; Heino Buddenberg, chief executive officer of Waelzholz, a global manufacturer of high-quality cold-rolled steel strip and shaped wire; and Georgios Giovanakis, chief sales officer at steelmaker Thyssenkrupp.

They said that a “Trumpish” approach should be used, to include steel derivatives in the scope of a new trade regime from July 1.

“Europe is at risk of losing steel processing and steel-based manufacturing,” Julius said. “This will put Europe into new dependencies on critical components, weakening its economic resilience further.”

Stakeholders argued that, in an increasingly volatile geopolitical environment, the EU’s regulatory pace was struggling to keep up with the more rapid, interventionist approaches seen in other major economies, particularly the US.

“We’re in the first line after steel manufacturing, producing precision sheet in Germany, Brazil and China, and we see that Europe is more or less getting out of the business, because our customer base is melting like butter in the sun,” Buddenberg said.

“Europe started with a CBAM mechanism and with a safeguards mechanism to protect the first line of the value chain,” he added, “but that just increases the speed of diminishing the manufacturing industry as their competitive point.

“The protection mechanism generates inflation at this first level… It’s very easy to import 100% Chinese-made motors and converters, and components that are totally outside any protection [measures], and that will lead to all the major OEMs [original equipment manufacturers] purchasing Chinese equipment because of market pressure,” he said.

Panel event participants agreed that the entire steel and metals value chain should be protected, otherwise it would “break at the weakest part.” In other words, there was little value in protecting an industry that would end up without customers.

Therefore, enabling faster policy responses and reducing the administrative burden on industry would be key in the safeguarding of the industry.

The European Commission was considering a major expansion of CBAM, but the newly covered sectors would be included only from January 1, 2028, Fastmarkets understands, subject to final adoption of the addition.

The year 2028 was considered “too late” and panellists once again warned about the leakage of high-value-added production outside the over-regulated European market.

EUROMETAL called on national and European policymakers to recognize the urgency of the situation and to take the necessary steps to secure the future of the European steel and metals industry.

European steel market pauses
Flat steel
Despite earlier expectations of a gradual price rebound during the time of the fair, trading remained quiet.

“The market is in a holding pattern and waiting for clarity on import quotas,” a buyer in Germany said.

In late March and early April, flat steel producers indicated preliminary offers for July-delivery hot-rolled coil in Northern Europe around €750-780 ($885-920) per tonne ex-works.

But buyer sources confirmed during the fair that such prices were still “wishful thinking” despite import constraints and production issues at some European suppliers.

“There is no shortage [of HRC], and a lot of import material was booked early to secure availability ahead of the new trade regime,” a second buyer said. “The level of stock across the entire supply chain is quite high.”

A large European steelmaker sold a significant tonnage of HRC, cold-rolled coil and hot-dipped galvanized coil for second-quarter delivery to several steel service centers (SSCs). The total volume was about 50,000 tonnes, with HRC accounting for about half of that.

The HRC price was reported around €680 per tonne ex-works, CRC at €790 per tonne ex-works and HDG at €800 per tonne ex-works.

Trade sources said that SSCs were looking to replace flat steel volumes due to technical issues at a Benelux-based integrated mill, which has been unable to deliver some orders.

Achievable prices for HRC were indicated at €700-720 per tonne ex-works during the fair – still far below mills’ target levels.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €709.48 ($836.71) per tonne on April 16, down by €9.48 per tonne from €718.96 per tonne on April 15.

The index was also down by €10.52 per tonne week on week but up by €3.85 per tonne month on month.

Market participants told Fastmarkets that buyers were mostly holding back, awaiting more clarity on country-specific quota allocations before committing to purchases.

Earlier this week, the European Council and European Parliament reached a provisional agreement on a new trade regime. A new tariff-rate quota (TRQ) system was set to replace the existing steel safeguard measures starting from July 1.

This will cut the overall volume of steel import quotas by approximately 47% compared with the 2024 safeguard quotas (18.3 million tonnes of import volumes per year), and will increase the out-of-quota duty to 50% from the current 25%.

Country-specific TRQ volumes for the new trade regime were expected to be revealed in late April or early May, market sources said.

Several insiders told Fastmarkets that they expected leading European suppliers to come back with firm offers for third-quarter delivery coil once the country-specific TRQ volumes were revealed.

“Demand will not recover substantially this year,” a steel service centre told Fastmarkets. “All this push for higher prices is driven by trade defense measures.”

Long steel
Meanwhile, long steel producers were also pushing for substantial price rises across Europe amid rising costs and tightening import activity, but regional acceptance was uneven.

Seasonal improvement in construction activity was providing support to European long steel producers. Market participants from Germany and Italy reported notably better demand compared with the winter months, but in France and Poland the demand was still said to leave much to be desired.

The fact that construction planning is more long-term than in the automotive sector also makes long steel market less exposed to unstable geopolitical situations compared with flat steel, which is widely used in the automotive industry.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €665-680 per tonne on April 15, up from €655-665 per tonne on April 8.

In Northern Europe, rebar offers reached €700 per tonne delivered versus €680 per tonne delivered last week, but saw only limited acceptance.

According to recent data, only buyers in Germany partially accepted the new price, while in France and Austria it was considered too high.

Italian suppliers also announced higher offers at €710-720 per tonne ex-works for the North of the country and €740-750 per tonne ex-works for the South.

These higher prices, however, have not been achieved in deals, with customers postponing the booking of new volumes while seeking more clarity on the situation.

As a result, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, exw Italy, widened upward slightly to €670-710 per tonne ex-works on April 15, compared with €670-700 per tonne on April 8, reflecting tradeable values reported by industry sources.

Another supportive factor came from the policy side, where tighter trade controls were reinforcing the upward pressure on domestic prices.

On April 10, the European Commission reinforced steel safeguarding measures on steel rebar and merchant bar, closing a loophole that allowed circumvention.

It had found that importers were exploiting a loophole in the steel safeguard system by slightly tweaking the chemical composition of rebar so it could be declared under a different product category (CN code 7228 30 69 ) that had more available quota, which allowed shipments to bypass the stricter limits meant for rebar.

The Commission did not change the quotas themselves but instead introduced more precise product classification codes (TARIC codes) to clearly separate rebar from similar products, effectively shutting down this workaround and forcing those imports back under the correct, tighter quota regime, restoring the intended protection for EU producers.

Notably, codes 7228 30 69 11 (ribbed or deformed reinforcing steel) and 7228 30 69 99 (other) were added.

The regulation came into force on April 10 this year and will apply to the new safeguard regime starting on July 1.