Tag: rerollers

Finalized benchmark and default values
Under the EU’s CBAM steel regime, benchmark values are standardized carbon-intensity reference figures used to calculate the embedded emissions cost of imports based on typical production pathways.

Default values are preset emissions figures applied when verified actual emissions data is not available and are deliberately set higher to encourage reporting.

In the latest European Commission CBAM draft documents, finalized slab default values for origins such as China were set at higher levels than in previous drafts and very high defaults for some major slab-exporting countries were confirmed, Fastmarkets reported on Wednesday December 10.

Russia is the largest supplier of slab to Europe, with other key exporters including China, Indonesia, India, Brazil and Vietnam. Based on finalized default CBAM values for 2026 estimated by Fastmarkets, the estimated costs for slab imports using default emission intensities are approximately €144 ($168) per tonne for China, around €149 per tonne for Russia, about €230 per tonne for India and €541 per tonne for Indonesia, while Brazil’s defaults are calculated at a comparatively lower €22 per tonne.

The latest documentation also includes future annual mark-ups from 2026 onward, with default values set to rise annually to 10% in 2026, 20% in 2027 and 30% from 2028 onward, reflecting CBAM’s phase-in and the declining availability of free allowances in the EU Emission Trading System (ETS).

‘Unworkable’ default values and actual emissions verification
One plate producer source said the benchmark figures did not come as a surprise to market participants but added that the final default values with mark-ups included were a ‘blow’ to Italy’s slab and plate markets, which are heavily reliant on slab imports as feedstock for flat steel production.

“The final default values practically make CBAM reporting by defaults infeasible for most importers. It will be the year of convulsive verifications of actual emissions,” the producer source said.

A second slab buyer said the default values are ‘unworkable’ for many major exporting countries.

Sources said the biggest issue in the new year, once CBAM enters its definitive phase, will be ensuring slab suppliers fulfill their obligations to verify and report their actual emissions.

Emissions verification
From 2026, the EU has stated in regulatory documents that CBAM will require imported steel slab emissions to be verified by an accredited third party and the technical methodology may not need to be completely novel.

Sources said CBAM emissions verification could resemble established processes such as those used for Environmental Product Declarations (EPDs), with verifiers like TÜV, DNV and others already equipped to conduct audits and site checks.

But industry sources noted concerns that geopolitical tensions and varying regulatory capacity across exporters could make it harder for some countries to provide the credible, verified emissions data required under CBAM.

Risks with payments deferred
Sources also noted that CBAM duties will not be paid at the point of import in 2026. Instead, the definitive CBAM regime starts on January 1, 2026 and importers will first be required to purchase and surrender CBAM certificates in 2027 covering the embedded emissions of goods they imported in 2026, with annual declarations and payments due by then.

This deferred payment timing means companies will carry the cost through 2026 but only cash out when certificates are surrendered the following year, raising concerns among some producers about cash-flow pressure and insolvency risk if large volumes are imported before costs crystallize.

Slab market update
Currently, the Italy’s slab import market has stalled due to uncertainty around CBAM, with buyers said to be withholding from purchasing because of CBAM-cost considerations and a lack of clarity around whether suppliers, importers or end-users will take on the CBAM cost burden.

So far, Fastmarkets has not heard import offers from suppliers with CBAM costs included, as has been observed in downstream steel markets such as heavy plate and hot-rolled coil.

Fastmarkets’ weekly price assessment for steel slab import, cif Italy was $500-520 per tonne on Thursday, unchanged since November 6.