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.”
While European mills were offering premiums for such steel at a minimum of €200 per tonne, or even higher in some cases, tradable values were mostly lower.
Buyer sources estimated that the achievable premium for such steel was €100-150 per tonne, with some bids coming in even below €100 per tonne.
Mill sources gave higher estimates of around €170-200 per tonne.
One buyer source said for green steel with such emissions threshold it was possible to get premiums at €120-130 per tonne for larger volumes.
Fastmarkets’ assessment for the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe was €120-170 per tonne on Thursday, narrowing down by €10 per tonne from €120-180 per tonne seven days earlier.
A large distributor in Northern Europe said that while it was getting regular inquiries from end users for steel with a lower emissions threshold, “only a small portion of inquiries was resulting in actual sales.”
And a second buyer source told Fastmarkets: “It’s not exactly a good time to charge premiums. Green steel remains a niche market so far, but hopefully the [Carbon Border Adjustment Mechanism] (CBAM) and [the European] Steel and Metals Action Plan will give it a push in the next few years.”
Earlier this month, the European Commission launched a public consultation on the CBAM, with the aim of refining the framework and closing potential loopholes.
The European Steel and Metals Action Plan, which was published in March is also expected to support and promote the adoption of green steel across supply chains and to grant European steelmakers access to “affordable green energy.”
So far, high prices for electricity remain one of the major stumbling blocks to the decarbonization of the steel industry in Europe because the new green steel capacities announced in the region are predominantly electric-arc furnace (EAF) facilities.
Electricity prices in Europe remain significantly higher than in many other regions, with industrial rates often exceeding €100 per MWh – compared with around €30-50 per MWh in parts of the US and China – posing a major challenge for the EU’s energy-intensive industries such as steelmaking.
Green long steel
Fastmarkets’ assessment for the green steel, differential to steel reinforcing bar (rebar), domestic, delivered Northern Europe was €15-30 per tonne on July 30, stable week on week.
While Fastmarkets’ methodology defines European green long steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.5 tonne of CO2 per tonne of steel,” EAF producers using scrap as feedstock typically emit around 0.8 tonne of CO2 per tonne of steel.
During the assessment week, buyer and seller estimates of achievable values for such steel were reported at €15-30 per tonne.
One source reported premiums going up to €50 per tonne and said that, depending on the tonnage and carbon emissions threshold, it was possible to achieve higher premiums in deals.
But this level was not widely confirmed by other market participants.
“Getting a premium for ‘green’ [rebar] is very challenging. The market is very weak – even for regular ‘grey’ longs,” a mill source told Fastmarkets.
