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.
