The introduction of CBAM and the revision of protective measures are curbing Europe's appetite for steel imports
Uncertainty over the EU's Carbon Boundary Regulation Mechanism (CBAM) and the introduction of new protective measures are limiting consumer demand for steel imports into the EU, trade sources told Fastmarkets on Thursday, September 4.
CBAM
As Fastmarkets has learned, the planned January 2026 rollout of CBAM is currently the main topic of discussion in the European steel market due to the ongoing lack of clarity regarding its implementation, just a few months before the official launch date.
On August 28, the European Commission launched three public consultations on the practical implementation of CBAM.
The purpose of these interrelated consultations was to finalize the rulebook for the full launch of CBAM – in particular, determining how emissions will be measured, how free EU quotas will be adjusted, and how existing carbon prices paid in other countries will be taken into account – to ensure that the mechanism is fair, efficient, and ready by January. 2026
Objectives of CBAM consultations
1. Determine the methodology for the final CBAM period (starting January 1, 2026)
The main goal
To develop and improve the methodology for calculating carbon emissions, both direct and indirect, in imported goods under CBAM, as soon as it becomes fully (final) applicable. the stage is in 2026.
This includes clarifying the use of actual emission data compared to default values, simplifying and standardizing calculation procedures, and ensuring compliance with EU ETS-based reporting, thereby reducing administrative burden and contributing to the preservation of environmental integrity.
2. Adjusting CBAM certificates to obtain free ETS permissions
The main goal
Establish detailed rules for adjusting the obligation of CBAM declarants (importers) to submit CBAM certificates, taking into account the free permits they would otherwise receive under the EU Emissions Trading System (ETS).
This ensures that carbon equivalent prices will be set for goods produced in and outside the EU, thus maintaining a level playing field when these free benefits are phased out from 2026 to 2034.
3. The carbon price paid in a third country
The main goal
Define rules and procedures to enable importers to reduce their CBAM certification obligations by accounting for carbon prices already paid in a third country (outside the EU).
This includes specifying how to convert such payments into euros, what evidence should be provided, and who can verify them in order to ensure fairness and avoid double penalties.