Fastmarkets defines green steel as material with combined Scope 1, 2 and 3 carbon emissions not exceeding 0.8 tonnes of carbon dioxide (CO2) per tonne of steel produced.
One seller reported achieving premiums within the range of €180-200 ($207.10-230.11) per tonne in deals with customers who have committed to buying a share of low-carbon material.
A producer said that deals for green flat steel are combined with purchases of traditional grey material. And while the share of green material in total purchase is low, the total cost of the premium does not feel as punitive.
Still, the producer does not see demand for green flat steel.
Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €0-200 per tonne on Thursday, widening upward by €50 from €0-150 per tonne on June 11.
While business was thin, lobbying intensified in recent weeks, including an early June push by Transport & Environment (T&E) for low-carbon steel credits in EU automotive CO₂ standards as a mechanism to support green steel deployment.
This week three of Europe’s leading steelmakers – ArcelorMittal Europe, thyssenkrupp and voestalpine – have jointly called on EU policymakers to halt the rises in the costs of carbon under the bloc’s Emissions Trading System (ETS) until low-carbon steelmaking becomes economically viable.
The producers, which together account for around 60% of Europe’s integrated steel output, warned that the current trajectory of the ETS risked undermining the region’s industrial base unless adjustments were made.
Under the current framework, the cost of producing steel in the EU could increase by around 50% by the early 2030s, while imported steel-intensive products were not subject to equivalent carbon costs and EU exports received no compensation, creating a competitive imbalance.
The three companies estimated that, without reform, steel-intensive manufacturing activity in the EU could decline by 30-40%, putting as many as 5 million jobs at risk across the value chain, and undermining the bloc’s intention to raise manufacturing’s share of gross domestic product (GDP).
To address these risks, the steelmakers were calling for a temporary pause in ETS cost escalation until the conditions for economically viable decarbonization were in place, alongside stronger support for early-stage projects and measures to balance import and export competitiveness.
According to Fastmarkets base scenario forecast, the cost of ETS in 2026 should average €80.52 per tonne in 2026 and rise to €104.62 in 2027.
At the same time, media reports earlier this week suggested that the European Commission is preparing amendments to the ETS that would prolong free emissions allowances for industry in return for investment commitments within the EU, according to an internal document seen by Reuters.
Although the bloc had originally intended to gradually eliminate free allocations as part of its decarboniZation strategy, mounting pressure from industrial groups and member states has led policymakers to reconsider measures aimed at protecting Europe’s industrial competitiveness.
The revised ETS proposal is due to be presented on July 15 and is also expected to require member states to channel a greater share of ETS revenues into supporting industrial decarboniZation efforts.
According to market sources, free allowances cover around 75-80% of European steel industry emissions, with details depending on the installation, production route and efficiency.
Under the current system, free allocations are supposed to gradually phase out from 97.5% in 2026 to 95% in 2027, 09% in 2028, 77.5% in 2029, 51.5% in 2030 and down to 0% in 2034
