Urgent reforms needed for effective implementation of CBAM, says Eurofer
by David Fleschen

The European Steel Association (Eurofer) has called for urgent reforms and the swift implementation of the Carbon Border Adjustment Mechanism (CBAM), highlighting its importance for the competitiveness and decarbonisation of the European steel industry.
Eurofer underlines that European steelmakers have been part of the EU Emissions Trading System (ETS) since its launch in 2005, bearing the financial burden of a unilateral carbon price, which recently reached around €75 per tonne of CO2. At the same time, approximately 25 million tonnes of steel—equivalent to around 20% of the EU’s production—are imported annually from non-EU countries without any carbon cost. Eurofer asserts that the scheduled introduction of CBAM in 2026 is crucial to prevent carbon leakage and to support the ongoing decarbonisation investments by European steelmakers.
However, Eurofer cautions that CBAM is a pioneering and complex mechanism, particularly for the steel industry, which is characterised by diverse products, production methods with varying carbon intensities, and intricate global trade flows. In a statement, Eurofer outlined the need for a robust and carefully designed mechanism to ensure its effectiveness from the outset. Key reforms proposed by Eurofer include:
- Structural support for exports: Eurofer advocates for a mechanism that ensures European exports remain competitive in the global market.
- Stronger measures against circumvention: This includes addressing practices such as resource shuffling, which could undermine the CBAM’s purpose.
- Expanded scope: The CBAM should include steel-intensive downstream sectors to fully address carbon leakage risks.
Eurofer also stressed that several design elements, such as stringent default values and adjustments to free allocation mechanisms, must uphold the environmental integrity of CBAM while offering sufficient protection to prevent carbon leakage.
According to Eurofer, the combination of CBAM and the scheduled phase-out of free allowances could, without proper design adjustments, fail to protect European industries adequately. This, in turn, could incentivise the relocation of production outside the EU, negatively affecting both steel manufacturers and downstream sectors. The association emphasised that these changes must be implemented this year to ensure readiness before the CBAM’s full launch in 2026.
Eurofer further highlighted the importance of balancing effectiveness with administrative simplicity. It suggested streamlining CBAM procedures to reduce unnecessary burdens on operators. Among its recommendations are:
- Excluding CBAM reporting obligations for European products exported outside the EU, processed abroad, and later reimported into the EU.
- Converting the current de minimis threshold of €150 into a weight-based unit, such as 1 tonne, to avoid excessive reporting for small shipments.
Eurofer warned, however, that simplification measures should not compromise CBAM’s effectiveness. For example, broad exemptions for small companies that are not tied to the size of their consignments could weaken the mechanism.
"Delaying its implementation or launching CBAM without these essential improvements would further erode the competitiveness of the European steel industry," Eurofer stated. "It is also important to recognise that CBAM is not a silver bullet. Industrial competitiveness must be embedded across all policies, particularly in the areas of trade and energy."
Source: Eurofer, Photo: Fotolia