EUROFER: ETS revision pushes EU steel carbon costs toward €8.2bn by 2031, and sets the CBAM price path

EUROFER puts the EU steel industry's annual carbon costs at roughly €3.4 billion for 2026 and warns they will climb to approximately €8.2 billion by 2031 under the EU ETS revision now in co-decision. Trade press carried the European steel association's warning on September 24, 2026. Why does a producer-side cost projection belong on an importer's desk? Because the free-allocation phase-out that generates EUROFER's cost curve is the same schedule that ramps up the CBAM factor, and with it the number of certificates every EU importer of steel must surrender.

What EUROFER warned on September 24

EUROFER projects that the EU steel industry's annual carbon costs will rise from around €3.4 billion in 2026 to approximately €8.2 billion in 2031 under the proposed EU ETS revision, with carbon costs for blast furnace steelmaking reaching roughly €100 per tonne by 2030 and exceeding €200 per tonne from 2031. At those levels, the association argues, conventional blast furnace production becomes economically unviable in the EU. SteelOrbis and IndexBox both carried the figures on September 24, 2026.

The projection lands against an investment backdrop that EUROFER describes as split. Investment decisions are secured for low-carbon steel projects representing approximately 35 million tonnes of capacity, while projects representing more than 10 million tonnes of steelmaking capacity have stalled because their business cases deteriorated. The six headline figures are summarized below.

One familiar EUROFER number is absent from the September 24 reporting and needs dating. The claim that €45 billion of EU steel exports are at risk comes from an earlier EUROFER press release, the association's December 2022 response to the agreement on the previous ETS revision, titled "ETS revision sets stronger incentives for clean technologies uptake, but €45 bn EU steel exports are still at risk, says EUROFER." That release page is no longer live, and neither trade press article carrying the new cost figures repeats the €45 billion number. The underlying export exposure it described has not gone away: EU steel sold abroad bears the full EU carbon cost with no equivalent charge in destination markets, a problem EUROFER Director General Axel Eggert has long attributed to a rising EU carbon price that has no counterpart in the home markets of the EU's major trading partners.

Why the producer cost curve is the importer cost curve

The free-allocation phase-out that drives EUROFER's €8.2 billion projection is the identical schedule that raises the CBAM factor from 2.5 percent in 2026 to 100 percent in 2034, so every step that adds carbon cost for EU steelmakers adds certificate liability for EU steel importers. EU producers pay for a growing share of their emissions as free EU ETS allowances shrink. Importers surrender CBAM certificates for the same growing share of their imports' embedded emissions, priced at the quarterly average of EU ETS auction prices.

The arithmetic converges on the same numbers EUROFER cites. Blast furnace steel carries roughly 2.0 tCO₂ of embedded emissions per tonne, so a carbon price of €100/tCO₂ produces the €200 per tonne cost EUROFER projects for producers from 2031. An importer of the same steel faces the same €200 per tonne of full carbon cost, scaled by the CBAM factor for the import year. The free allocation phase-out schedule sets that factor year by year under current law.

The price side of that multiplication is running its own arc. The Q1 2026 certificate price was €75.36/tCO₂e and the Q2 price €75.28/tCO₂e, and the Q3 average, due for publication in the first week of October, prices the quarter in which EUA auctions have traded well above those levels. EUROFER's €100 and €200 per tonne scenarios assume a carbon price materially above today's certificate prices, which is what makes the projected doubling of the industry's cost base plausible rather than alarmist.

EUROFER's asks meet a revision already on the table

EUROFER calls for a slower free-allowance phase-out in the near term followed by a faster withdrawal, plus a fair and pragmatic transition to CBAM, and it makes those demands about a revision the Commission has already drafted. As reported by SteelOrbis, the association wants "a slower phase-out of free allowances over the next five years, followed by a faster withdrawal once the conditions required for industrial decarbonization are in place." Its wider list pairs the phase-out demand with affordable green energy, safeguards against unfair competition, access to scrap, and investment support.

The vehicle for all of this is COM(2026) 616, the ETS Phase 5 revision that slows the CBAM phase-in by returning 15 percent of the phased-out free allocation from 2028 and moving the full phase-out from 2034 to 2038. EUROFER's warning shows the proposal's limits from industry's perspective: the €8.2 billion projection for 2031 is calculated under the proposed revision, meaning carbon costs still more than double within five years even on the slower schedule. The demand for a faster withdrawal later, conditional on decarbonization conditions being in place, is EUROFER's attempt to shape how co-legislators redraw the curve rather than whether they redraw it.

Timing gives the intervention its point. ETS review positions are due by year-end and trilogues start from January 2027, per Parliament lead negotiator Peter Liese, so the free-allocation trajectory for 2028 through 2038 is being negotiated now.

What the warning means for CBAM importers

Importers can treat EUROFER's numbers as a supplier-side stress test of their own certificate budgets, because both cost curves move on the same two variables: the CBAM factor schedule and the carbon price. Four practical readings follow for compliance teams.

1. Model the current-law factor schedule as the ceiling. The 48.5 percent factor in 2030 and 100 percent in 2034 stand unless COM(2026) 616 is adopted, and nothing in the 2026 or 2027 obligations changes either way.
2. Test budgets at €100/tCO₂. EUROFER's 2030 scenario sits about a third above the published 2026 certificate prices. Run the number through the CBAM cost calculator against your own import volumes.
3. Watch the trilogue calendar, not the press releases. The factor table for 2028 onward is decided in the ETS file, and positions land by the end of 2026.
4. Read supplier pressure as a sourcing signal. Stalled decarbonization projects, including the more than 10 million tonnes EUROFER counts, mean EU low-carbon supply arrives later, which keeps the emissions intensity of available steel, and therefore certificate demand, higher for longer.

The next fixed data point is the Q3 2026 certificate price in the first week of October. It will show how much of the price arc EUROFER warns about has already reached the number importers actually pay.