The Carbon Border Adjustment Mechanism (CBAM) must be extended to include steel-based manufactured products, but a big challenge is bringing this message home to policymakers in Brussels, said speakers at Kallanish Europe Steel Markets 2026 in Vienna.
For one thing, the steel industry in the minds of many is limited to the steelmaking industry, the mills, ignoring the ancillary industries in the longer value chain. The players further down the chain, fabricators and manufacturers of steel-based products, are mostly smaller companies and easily overlooked, said Alexander Julius, president of distributors association Eurometal.
The big steel mills under association Eurofer have traditionally had a good standing at the European Commission, so their pleas for trade measures have been heard, he noted. The political ties are even stronger with the automotive industry, which is delicate because carmakers “are the biggest beneficiaries” of parts made outside the European Union.
This is fatal for the mainly small and medium enterprises (SMEs), which are fragmented, but they supply material and jobs, which are massively under threat within the union. The SMEs “do not have offices in Brussels; they cannot sit on the laps of functionaries and have lunches with them,” Julius said.
His wording provoked reaction from the audience from a representative of Tata Steel, who stated that “lobbying is a lot of hard work, analytical work, and not just eating lunches”. Still, he conceded that “in the core, you are right”.
Julius further pointed out that not only jobs are at stake, but also European industrial independence, and national/continental security, if parts made in China dominate Europe. “Initially, they [Chinese suppliers] are pleasing us with low prices, and then they will be controlling us. And will the prices remain low? No,” Julius asserted.
“They are controlling us in defence; that means all the components which are necessary to build a drone. That means they are going to dictate how much we are getting at what price,” he added.
His argumentation was continued by Jiri Mravec, head of innovation & transformation at Trinecke Zelezarny. “We are not living in a peaceful world. Nobody wants to depend 100% on imports,” he clarified.
As long as there are loopholes downstream, importers will find room for circumvention. “I would not be naïve in this, I would make CBAM as strict as possible,” Mravec said. He used the example of railway products and bearings, which are both produced by his company. “That seems illogical not to be included [in CBAM] because it’s 100% steel, so I think it’s absolutely crucial that we close the downstream loophole.”
“If we in Europe decide to be a green island, we need to be an island for the whole value chain,” he added. “For the end customer, this means, yes, they have to accept a larger price tag.”
From the floor, M7 Metals founding partner Philip Edmonds agreed with the logic of extending CBAM downstream but warned against blaming CBAM for Europe’s industrial problems. He highlighted the example of a washing machine, pointing out that the CBAM cost on the steel weight would only raise the overall cost of the washing machine by a fraction. “No washing machine manufacturer in Europe is moving outside of Europe because of CBAM. They are moving because of the work culture in Europe,” Edmonds said.
“We should not forget this is the first year, so the free allowances or allocation adjustments for CBAM is 97.5% this year. That’s going to go down. And from 2030, this is going to go really fast,” SteelConsult International managing director Giles Callis countered from the panel.
Author: Christian Koehl
