After several years of announcements, pilot projects, and branding, Green Steel is still a niche market, even in Europe, where the decarbonization movement has begun.
But 2026 looks like it will be the first year when the ambitions of "green steel" will face a changed political environment and an inexorable market reality. The introduction of the Carbon Dioxide Emissions Regulation Mechanism (CBAM) in January 2026 in the EU is expected to be a watershed moment that will lead to clearer definitions, change the cost structure and begin to separate the first winners from the laggards.
While Europe is under pressure from regulation, Asia is guided by economic and technological pragmatism, and the Middle East positions itself as a strategic supplier of steel and raw materials with ultra-low emissions. The United States, meanwhile, is entering a period of uncertainty as the new administration signals a shift away from federal green industry goals, creating a more fragmented landscape in which government-level incentives and corporate demand, rather than national policies, will determine the trajectory of low-carbon steel production. Together, these regions will define a competitive environment for the production of environmentally friendly steel over the next few years.
Fastmarkets has prepared a forward-looking overview of what the global clean steel market can expect in 2026, as well as key challenges and opportunities associated with the transition of some regions from using clean steel to measurable decarbonization.
Europe: Definitions, regulations and rising costs
It will become increasingly difficult for Europe to maintain uncertainty about "green" steel. Implementation of CBAM (in the ratio of 3:5) will force manufacturers and importers to quantify emissions with unprecedented accuracy.
As CBAM payments become financially significant, the market can no longer be guided by uncertain "green branding" or mass balance. Instead, Europe will be forced to move towards a more consistent emission intensity threshold covering areas 1, 2 and, increasingly, 3. This will bring Europe closer to emerging systems abroad, including the Indian star rating system of 2024 and regulations applicable in various regions regarding "clean" materials.
In this context, the need for harmonized certification and labeling of "green steel", which is designed to ensure transparency and trust in the market, is becoming crucial. Without reliable labeling and tracking of supplies, Europe risks undermining confidence in the environment.
