Uncertainty about the European Union's Carbon boundary regulation mechanism (CBAM) continues to put pressure on the stainless steel market, Fastmarkets reported at the World Stainless Steel Industrial Fair in Maastricht, the Netherlands (November 18-20).
The CBAM, which enters its final phase on January 1, 2026, will require importers to pay for carbon emissions associated with goods such as stainless steel, bringing costs in line with the EU's Emissions Trading System (ETS).
Despite the leak of key control documents earlier this week, market participants said that the difficulty of complying with the requirements and the lack of definitive values continue to hinder trading.
"The EU has postponed the publication of some of the most important figures that are used to calculate this tax," Gabriel Rosenberg, chief executive officer of CBAMBOO, said during a panel discussion at the event. "The lack of certainty is very frustrating."
Rosenberg noted that the payment obligations fall on the importer, regardless of the size of the company. "If you're a record importer, you pay," he said.
The verification requirements are also a concern.
"If all suppliers in the world need to be audited at the same time, there are not many auditors on the planet who can do this kind of work," said Christophe Lagrange, Secretary General of EURANIMI.
The leaked draft rules distinguish between evidence-based emission determination methods and default values.
"We analyzed the numbers and saw that the default values lead to the CBAM tax reaching 540 euros ($625) per ton if the default value is used," Lagrange said.
Tom Lord, head of trading and risk management at Redshaw Advisors, said that the CBAM price will be determined based on the volatile price of ETS in the EU.
"Your risks for CBAM are based on market price fluctuations," he said. "Most analysts predict that prices will rise in the range of 90-120 euros in the next couple of years."
"With the right approach, CBAM can be an opportunity for both European manufacturers and importers, if they hedge their risks correctly. If you don't insure them, you will be at the mercy of the market," the Lord added.
According to the published draft application, in a hot-rolled steel roll, the base values of carbon dioxide (tCO2) per ton for blast furnace/oxygen converter furnace (BF/BOF) production are 1,530 tons per ton for direct reduction cast iron/electric arc furnace, 1,033 tons of CO2 per ton (DRI/EAF) and 0.288 tCO2 per ton for EAF-based waste treatment. But since the final
