Source: Argus Media
The European steel association Eurofer warned on 24 September 2026 that annual carbon costs for the EU steel industry could rise sharply from approximately 3.4 billion euros in 2026 to 5.7 billion euros in 2030 and 8.2 billion euros in 2031 under proposed changes to the EU Emissions Trading System.
Eurofer is urging the European Commission to slow the rate at which free carbon allowance allocations are phased out. The association has proposed retaining 90 percent free allocation through 2030, compared with the 59 percent proposed by the Commission, before reducing to zero by 2038 rather than 2034.
Eurofer director-general Axel Eggert emphasized that withdrawing carbon leakage protection too quickly risks undermining the investments needed for decarbonisation. The association estimates that carbon costs for conventional blast-furnace steel could reach around 100 euros per tonne by 2030 and exceed 200 euros per tonne from 2031, levels that would render the traditional production route economically unviable.
According to Eurofer, investment decisions have been taken on approximately 35 million tonnes per year of low-carbon steel capacity planned for operation between 2027 and 2032. However, projects covering more than 10 million tonnes per year have stalled as the business case has weakened amid uncertain policy conditions. Eurofer also called for reinvesting all revenues from the phase-out of free allowances back into the affected sectors.
