European Commission provides critical CBAM cost component
The price of Carbon Border Adjustment Mechanism (CBAM) certificates for the first quarter of 2026 has been set at €75.36 ($87.23), the European Commission revealed on Tuesday.
Prices are calculated by the Commission as the average of EU Emissions Trading System (EU ETS) auction clearing prices. This ensures a fair and consistent alignment with the EU carbon market, the Commission says. 2026 prices are calculated quarterly, while for imports from 2027, the Commission will calculate a weekly price for CBAM certificates, Kallanish notes.
The Q1 price aligns exactly with the European Energy Exchange (EEX) price published last week. It is lower than some market participants had been expecting given the much higher prices of ETS certificates in January, when they peaked at over €92. They have since come down as a result of the European Commission signalling it will revise the ETS system.
The published price is the last piece of the puzzle needed to calculate the CBAM cost per tonne of steel using the formula: actual or default embedded emissions – (corresponding emission benchmark x CBAM factor) x EU ETS (CBAM) price – carbon tax paid.
The CBAM price applies to each certificate that applies for every tonne of CO2 equivalent for goods imported between January and March. “So if you imported iron, steel, cement and other CBAM goods into the EU in the first quarter, then next year when you come to make your CBAM declaration, you’re going to be having to buy those CBAM certificates at €75.36,” says Cbamboo founder and chief executive Gabriel Rozenberg.
This is an important development for EU importers as “you have a real published price to calculate your Q1 liability”, says CarbonChain carbon specialist Jack Laing. Based on the published Q1 price, imports from India of 720837 hot rolled coil would incur a CBAM cost of €254.13/tonne for Q1 clearances when using default values. Using actual values could potentially bring that cost down by five-fold, points out CarbonChain product manager and CBAM lead Nick Oglilvie.
CBAM declarants will only begin purchasing CBAM certificates from February 2027. The early publication of certificate prices aims to enhance transparency, provide stakeholders with timely information, and reduce the risk of inconsistent or unofficial price estimates circulating in the market, the Commission notes.
Certificate prices for Q2, Q3 and Q4 2026 will be published on 6 July 2026, 5 October 2026 and 4 January 2027 respectively.
Author: Adam Smith
EUROMETAL participates in Cattwyk panel discussion on circularity in the steel sector
EUROMETAL President Alexander Julius participated as a panelist in the event “In the Loop with Cattwyk | Circularity in the Steel Sector”, held in Brussels on 5 March 2026. The event launched Cattwyk’s new series of discussions dedicated to the circular economy and its implications for European industry.
The panel brought together representatives from across the steel and manufacturing value chain, including Harriet Dalger (Damen), Adolfo Aiello (EUROFER), Hans Henning Hein (Jungheinrich), Dr. Carmen Ostwald (LESS) and Ulrich Adam (Orgalim).
Discussions focused on the strategic importance of steel and metals for Europe’s industrial future, as well as the challenges the sector faces in terms of competitiveness, decarbonisation investments, energy costs and international competition. Particular attention was given to the implications of the EU Steel and Metals Action Plan (SMAP), the Carbon Border Adjustment Mechanism (CBAM) and upcoming initiatives such as the Circular Economy Act.
During the debate, Alexander Julius emphasised the importance of maintaining a level playing field for the entire European steel value chain, stressing that EU legislation should not only focus on primary production but also take into account the role of steel distribution, service centres and downstream manufacturing industries.
He also highlighted the need for greater transparency and objectivity in assessing decarbonisation progress, including closer monitoring of imports of semi-finished products such as slabs, which continue to increase.
Another key point raised during the discussion was the complex design and hasty implementation of CBAM, which, continues to create uncertainty and risks undermining the competitiveness of European industry if not properly calibrated.
The event formed part of a broader dialogue on how circularity policies and climate legislation can support a competitive and sustainable European steel ecosystem, while ensuring that the entire industrial value chain remains viable.
EUROMETAL will continue to actively contribute to these discussions, advocating for balanced policies that support decarbonisation while safeguarding the competitiveness of Europe’s steel supply chain.
UK steel price outlook firm as safeguard reform and CBAM reshape market
According to the latest market evaluation by UK-based steel supplier All Steels Trading Ltd., the UK steel market is entering a major structural shift as existing safeguard measures approach expiry in June 2026 and as stronger protectionist policies are under consideration.
The report warns of significant price escalation driven by the EU’s CBAM already in force, pending UK safeguard amendments and the planned introduction of a UK CBAM from January 1, 2027.
According to the report, EU and UK mills have implemented merchant bar increases of £40/mt, while hollow and structural sections have risen by £50/mt. UK safeguard quotas for the first quarter were exhausted on the opening day across many long product categories, with All Steels reporting a £300,000 duty charge.
Quotas may be halved, duties could double
Industry speculation suggests that from July 1, 2026, UK safeguard quotas could be cut by up to 50 percent, while out-of-quota duties may rise from 25 percent to 50 percent. If implemented, such measures would materially reshape supply dynamics and pricing across the UK steel market.
Rising input costs – scrap, gas and transport
Cost pressures are intensifying across raw materials and energy. Scrap prices have increased steadily, with a $30/mt rise translating into roughly £25/mt higher manufacturing costs. European gas prices remain elevated at around €31.55/MWh, while freight costs have also firmed up.
Meanwhile, supply constraints are tightening, with 7-Steel facing an outage of four to five weeks, with Tata Tubes recovering from a January shutdown, and quotas allocated for Turkey exhausted in multiple categories, limiting new arrivals. British Steel output is reported to have slipped as production is prioritized for rail and export contracts.
The report concludes that 2026 pricing will be driven more by protectionist policy than by demand fundamentals. All Steels expects total price increases of £150-£200/mt this year and has opted not to forward-sell for the third quarter amid regulatory uncertainty.
European Commission seeks contractor to build CBAM certificate platform
The European Commission has launched a tender to establish the Common Central Platform, which will manage the sale and repurchase of certificates under the EU’s Carbon Border Adjustment Mechanism, with the system expected to become operational by February 2027.
The tender, issued by the Commission’s Directorate-General for Taxation and Customs Union late Feb. 16, will remain open until March 20, 2026.
“By Aug. 31, 2026, the contractor must have developed a pre-operational version of the CCP, incorporating all core functionalities necessary to support sales, repurchase and reconciliation operations, and ready for testing,” the Commission said in the tender.
This marks a key step in implementing the EU’s CBAM, which requires importers of carbon-intensive goods to purchase certificates corresponding to the emissions embedded in products entering the bloc. The mechanism aims to prevent carbon leakage by ensuring imported goods face similar carbon costs to those produced within the EU, potentially affecting trade flows of iron and steel, aluminum, cement, fertilizers, electricity and hydrogen.
EU’s CBAM started its definitive phase on Jan. 1, 2026, but importers will only be able to purchase CBAM certificates starting in February 2027 to cover the emissions embedded in their imports for 2026, giving businesses more time to adapt to this carbon pricing mechanism.
The Common Central Platform will serve as the centralized system for managing CBAM certificate transactions, handling both primary sales to importers and potential repurchases, according to the Commission.
The aim of CBAM is to level the playing field for EU companies, as most exporting countries either do not have a carbon price as high as that of the EU Emissions Trading System or do not have a price on emissions altogether.
Carbon permits in Europe are currently around seven times more expensive than compliance prices in China, the world’s industrial powerhouse.
Platts, part of S&P Global Energy, assessed EU Allowances for December 2026 at Eur70.21/mtCO2e ($83.09/mtCO2e) Feb. 17. This compares with China’s compliance emission allowance, or CEA, which was valued at Yuan 76.14/mtCO2e ($10.94/mtCO2e) Feb. 6, according to the Shanghai Environment and Energy Exchange.
EU policy boosts thyssenkrupp in Jindal talks: Lopez Borrego
The increasingly supportive EU policy environment is improving steelmakers’ valuations and playing into the hands of thyssenkrupp during its negotiations to sell a stake in its Steel Europe business to India’s Jindal Group, says thyssenkrupp group chief executive Miguel Lopez.
CBAM came fully into force from 1 January, while the new EU steel trade regime to replace existing safeguards is anticipated to begin from 1 July.
“The sentiment has turned into a positive one for the last four months. We have seen increases in [EU stock market listed steel companies’] share prices of around 50% and more. So there is a clear positive sentiment,” Lopez said during thyssenkrupp’s earnings call on Thursday monitored by Kallanish.
“It is also clear that this is due to the tariff situation, as mentioned before, and the limitation also of the import quota for Europe. And of course, the idea of resilience – and I’ve been reporting, you remember about the steel summit with [German] Chancellor [Friedrich] Merz and also talks that we had directly with [European Commission President] Ursula von der Leyen and her team. So yes, there is a clear positive sentiment here. And of course, that will have, for sure, to get into an input for the conversations with our colleagues from Jindal, no doubt about that,” he added.
The German industrial conglomerate remains in “intense” due diligence discussions with Jindal, he said. Its aim remains to sell a majority stake to the Indian group.
CBAM and the new trade regime have not had a tangible impact so far but do present an upside potential.
“It is expected that we will see improved pricing after the tariffs will be introduced in Europe,” Lopez said. “And also the CBAM – concrete CBAM actions will, I believe, also help. We will not see anything this fiscal year around it because we expect the European Union to decide on the tariffs around May, June. And until then everything is really getting into the orders; we will see an impact for sure next fiscal year. But the likelihood that we see this fiscal year some positive effects already in our view is, for the time being, very limited.”
Work on the Duisburg direct reduced iron plant continues to move ahead “with full commitment”, he noted. Formwork and reinforcement operations and major concreting work have been completed for the tower of the DRI plant and the two smelters, as have extensive construction measures for the plant’s technical infrastructure.
Italy seeks faster CBAM extension to downstream products
Italy is calling for a faster extension to the scope of the Carbon Border Adjustment Mechanism (CBAM) to downstream products, calling the current proposed start date of 1 January 2028 too distant, Minister of Enterprises and Made in Italy Adolfo Urso says.
The comments were made at a recent meeting in Rome with representatives from other ministries and industry associations, including Federacciai, Italy’s steelmakers’ association.
Urso noted that the scope of finished products covered by an expanded CBAM must be carefully defined to protect industrial value chains and avoid market distortions. He added that any potential inclusion of ferrous scrap should be considered. Clarity is also needed on how the temporary decarbonisation fund – designed to support exports – will operate, as well as any CBAM anti-circumvention mechanisms.
Regarding the review of the EU Emissions Trading System (ETS), Urso said it should take into account the first evidence emerging from CBAM and address existing market distortions, starting with excessive price volatility linked to speculation.
He added that for some energy-intensive sectors, climate neutrality remains technically and economically unachievable at present, effectively turning the ETS into an additional form of taxation. In this context, maintaining free allowances beyond 2034 would represent a balanced choice to recognise the efforts of companies already engaged in decarbonisation.
2026 must be the year of reform and a turning point. “The Commission now needs to take bold and pragmatic decisions to defend and revive European production in the most exposed sectors, such as automotive and energy-intensive industries,” Urso states in a ministry note obtained by Kallanish.
CBAM spurs coil rises but buyers retreat
Participants are warning the European market may not be ready to accept a large rise in coil prices following the recent announcement of increases by ArcelorMittal, Kallanish learns.
While the hike has likely been encouraged by the Carbon Border Adjustment Mechanism (CBAM) coming into effect since the start of the year, the preceding months saw a slow and gradual increase gaining ground.
“But attempts by steel mills to raise prices more quickly are likely to meet resistance from processors who are not yet able to pass on these costs,” a Dutch manager believes.
He sees recent import offers from Turkey and the Middle East for hot rolled coil at up to €540/tonne ($633) cfr Antwerp. When adding CBAM costs, depending on the case, there would be barely any import arbitrage, with domestic HRC trading at €630-650/t ex-works until last week, he says. ArcelorMittal’s new offers take HRC to €700/t.
The hikes appear bolder for cold rolled coil and hot-dip galvanized coil, with offers now standing for CRC at €830/t and for galvanized material at €820/t. The previous highest quotes were reported in the Netherlands at €750 for CRC and €760 for HDG.
Notably, CRC offer prices have now eclipsed that of HDG. A German observer tells Kallanish that domestic mills have had less interest recently in producing CRC, preferring HRC and HDG, resulting in CRC becoming scarcer on the market.
The Dutch manager also points at EU measures, such as the ongoing anti-dumping investigation into CRC, where higher duties are expected soon. For mills this justifies an extra premium for cold-rolled material, he notes.
One German buyer finds that ArcelorMittal “takes it too far” and that the new prices for CRC and HDG, in particular, “do not fit the market at all; maybe for some special high-grade material”.
He is concerned the new quotes will scare buyers, who will then become even more reserved. “Many will hold back their orders, and a standstill is always bad for the market,” he adds.
EU Commission pushes ahead with clause to temporarily suspend goods from CBAM in ‘serious and unforeseen circumstances’
Article 27a was in the amendment to the EU’s Regulation 2023/956 which was published by the EC on December 17 but is yet to be adopted by the co-legislators (Parliament and Council). After significant pushback from the fertilizer industry over the detrimental impacts of CBAM, combined with preexisting tariffs, the EC began to vocalize the use of Article 27a for the first time.
Wednesday’s announcement was also accompanied by “guidance on the CBAM mechanism,” marking the first time the EC has ever publicly discussed Article 27a and its implications.
Article 27a states that when the inclusion of a good in CBAM “causes severe harm to the Union internal market due to serious and unforeseen circumstances related to the impact on the prices of goods” it is empowered to “remove this good from Annex 1 until those serious and unforeseeable circumstances have passed.”
“This introduces more uncertainty around CBAM’s implementation, and some traders may adjust prices (or not fully price CBAM in) to account for the possibility of Article 27a being triggered for their product,” Fastmarkets’ senior economist Ben Crick said.
The CBAM regulation does not currently allow for the suspension or removal of goods from the scope of application of CBAM. Therefore, the EC has “included, as part of the proposal adopted last December 17, a new Article 27a would allow the Commission to remove goods temporarily.”
Crucially, Article 27a can apply retrospectively. Once it has been adopted by the co-legislators, affected goods can be removed from the scope of CBAM with retroactive effect.
This means, in a worst-case scenario, the EC has the power to remove any CBAM good from CBAM’s scope, retroactive to any date from January 1, 2026, the “serious and unforeseen circumstances” were deemed to have begun.
Providing there has been no objection from the European Parliament or Council, the EC can invoke Article 27a for up to five years and it can also be “tacitly extended for further periods of an identical duration,” the article read.
From 2027 onward — when CBAM certificates can be purchased — CBAM declarants will be reimbursed of the price they paid for the certificates when Article 27a did not apply, this was outlined in a Q&A published by the EC on Thursday January 8.
However, this does not negate the broader financial risk involved for many market participants if Article 27a is applied retrospectively.
European steel industry warns CBAM risks ‘structural mismatch’ between rules, reality
Provisional benchmarks and default values published on the website were unchanged from those outlined in drafts leaked last week.
The updated CBAM annexes were considered technically final but remained subject to formal adoption and publication in the EU Official Journal. They were expected to be published before December 25, sources familiar with the matter said.
But several European steel industry groups and associations have raised serious concerns while the EU’s CBAM moves toward definitive implementation – scheduled for less than two weeks from now.
Notably, EUROMETAL, the European Federation of Steel, Tube and Metal Distribution & Trade, warned that “CBAM is moving faster on paper than it can be delivered in practice.”
“At the end of 2025,” it said in a statement seen by Fastmarkets on December 17, “the European Commission has provisionally published a large number of detailed CBAM rules for the definitive period, running to hundreds of pages. However, critical elements of the system remain unresolved, including verification capacity, final ETS benchmarks and the treatment of precursors such as scrap.”
EUROMETAL warned that unresolved CBAM rules and insufficient verification capacity would force many companies to rely on default values, triggering significant unbudgeted cost increases across the steel value chain.
“Hundreds of installations are unlikely to be verified on time, despite acting in good faith,” the trade body said. “This creates a structural mismatch between legal obligations and operational reality… As a result, companies will be forced to rely on CBAM default values, not due to non-compliance but because verification is unavailable.”
Although verification will be legally required from 2026 onward, industry sources warned that verification at scale was unlikely before 2027, despite legal obligations.
“There is insufficient verifier capacity, especially outside the EU. Many third-country installations will not be ready or accredited in time,” a source in the EU steel market said.
Indeed, for some countries, default emission values were set at extremely high levels, pushing CBAM costs above €200 ($234) per tonne.
Another concern the association expressed related to the Commission’s recent update was the inclusion of scrap as a CBAM precursor. EUROMETAL noted that scrap cannot currently be traced to reliable emissions data, risking systematic miscalculation and further reliance on default values.
“EUROMETAL fully supports the EU’s climate objectives,” the group’s president, Alexander Julius, said, “but stresses that ambition must be matched by realistic timelines, proportionality and legal certainty. The federation is currently finalizing a formal position letter addressed to the European Commission, which will be submitted early next week.”
European steel association Eurofer welcomed the Commission’s work to close CBAM loopholes but said that current proposals “fall short of ensuring comprehensive and structural solutions.”
While EUROFER acknowledged that several weaknesses – such as risks to exports, downstream sectors and circumvention practices – have been recognized, it said that the proposed fixes were piecemeal, time-limited and insufficient to prevent carbon and jobs leakage.
It also criticized the limited scope of export protection (covering less than one-quarter of steel exports), uncertain funding for transitional measures, weak deterrence against resource shuffling, and narrow downstream coverage, which leaves gaps along the value chain.
It called for structural, long-term solutions to make CBAM “rock-solid and watertight from day one,” warning that without them the mechanism could “backfire” by further penalizing European steelmakers and their customers in a challenging global environment.
The VDMA (Association of German Mechanical and Plant Engineering) was more critical, warning that the downstream CBAM expansion “threatens Europe’s mechanical engineering industry.”
“Adding more products to the scope of CBAM increases complexity, bureaucracy and costs for EU businesses, contradicting the EU’s recent simplification efforts,” Holger Kunze, director of the VDMA’s European office, said on December 17. “This is the wrong signal for Europe’s machinery industry at a time of growing global trade tensions.”
European longs market quiet amid CBAM anticipation and upcoming winter holidays
No major changes have been reported in the European longs market this week. Most discussions among players have been focusing on the long-awaited release of official benchmarks and default values for CBAM calculation costs, as product prices seem to have remained stable and demand is weak ahead of the Christmas holidays.
“We are trying to sustain our [rebar sales] prices,” a source at an Italian mill said. Reported levels, however, have not changed since last week’s increase attempts, remaining in the range of €300-320/mt ex-works base (€560-580/mt ex-works including regular extras).
The same applies to the Italian wire rod market, where December prices have consolidated at €570-585/mt delivered for drawing quality and €550-565/mt delivered for mesh quality.
Market talk has been mainly focusing on anticipation regarding CBAM growing among steel market players in all segments in Europe. In fact, according to some rumors circulating, official EU benchmarks and default values for CBAM calculation costs are to be announced on December 16. “I hope [the values] will help us figure this out, because everything is so unclear,” a source commented. “We’ll have some fun next week,” another source added.
In the meantime, no updates have been released for rebar export prices in Spain, which remain at €570/mt FOB.
Little upward movements, however, have been reported in the import market from Turkey. With the euro-dollar exchange rate unchanged at 1.17, Turkish rebar prices have been reported at €510-520/mt CFR and wire rod prices at €520-530/mt CFR, up by around €5/mt compared to last week. Prices from Egypt have been reported at €500/mt CFR for rebar – up by €5/mt week on week – and at €505-510/mt CFR for wire rod, stable week on week. Finally, prices from Algeria have decreased by €15/mt week on week, standing at €490/mt CFR and €495/mt CFR, respectively, for rebar and wire rod.
