CBAM Gaps Threaten EU Steel Trade

EU steel

CBAM gaps threaten EU steel trade as Eurometal warns that the mechanism will go live without a full rulebook. CBAM gaps threaten EU steel trade because key benchmarks, default values and recognition of foreign carbon prices remain undecided. As a result, CBAM gaps threaten EU steel trade just as distributors negotiate 2025 contracts without legal certainty on future carbon costs.

Incomplete CBAM Framework Raises Contract and Pricing Risks

European steel distributors now face CBAM implementation in 2026 while several core design details remain unresolved at EU level. Benchmark and default values for embedded carbon are still under discussion, leaving buyers unsure how imported steel will be priced. At the same time, the methodology for recognising carbon prices paid in third countries remains unclear for many import routes. However, importers must already negotiate term contracts, while they cannot accurately model future CBAM-related charges. This lack of clarity creates room for speculative behaviour, mispricing and contractual disputes between mills, traders and end users. Small and medium-sized enterprises are especially exposed because they lack in-house compliance and pricing expertise to manage CBAM risk.

Eurometal Calls for Provisional CBAM Values and Clear Signals

Eurometal argues that CBAM can support decarbonisation only if steel market participants receive timely and predictable guidance from Brussels. The association has urged the commission to publish provisional CBAM benchmarks and default values without further delay. It also wants clarity on which downstream steel products will fall under CBAM coverage, including processed and fabricated items. Meanwhile, the sector is still waiting for details on the export adjustment mechanism that will affect EU steel shipped abroad. Eurometal proposes a provisional border charge to anchor expectations until the final legal text is adopted. It also calls for an EU-wide communication to calm markets and reduce uncertainty before the full CBAM phase-in. Without such steps, CBAM gaps risk undermining investment, hedging strategies and long-term decarbonisation planning in the EU steel value chain.

The Metalnomist Commentary

CBAM is meant to level the carbon playing field, but today CBAM gaps threaten EU steel trade and investment planning. Unless Brussels moves quickly with provisional numbers and clear communication, the risk is that confusion, not carbon, becomes the main cost driver in Europe’s steel imports.