Steel market disappointed by delay in setting CBAM benchmarks

The European steel market is expressing disappointment at the late determination of CBAM benchmarks, which are key to calculating the specific costs of embedded emissions for steel imports in 2026. This is stated in an article by McCloskey, a division of OPIS.

The European Commission has committed to clarifying the legislation by the end of the year. Currently, market sources expect technical implementation rules for the mechanism, along with preliminary benchmarks, to be released in December. However, the latter are likely to change before their official approval in early 2026 due to their inseparable link to the expected benchmarks for the Emissions Trading System (ETS) for 2026-2030. Although these benchmarks could potentially be published earlier, they must be finally approved after the new year.

The next phase of ETS development (2026-2030) envisages the gradual phasing out of free allowances for sectors at risk of carbon leakage, such as steel production, with the introduction of CBAM as an alternative mechanism. Therefore, next year, metallurgists will face an increase in carbon emission costs.

The gradual phasing out of free allowances and the increase in CBAM costs will occur at an increasing rate, starting at 2.5% in 2026.

As Benjamin Stephen, a journalist at McCloskey, points out, in essence, the concept of CBAM benchmarks does not really exist, and it is better to view them as a transfer or combination of ETS indicators.

This means, in particular, that the CBAM benchmarks published in 2025 as part of the EC’s executive acts are likely to illustrate this transposition methodology. They will be based on the current ETS benchmarks for 2021-2025 and are likely to change after the update for 2026-2030.

As GMK Center reported earlier, EU member states will vote on the remaining rules for implementing the cross-border carbon adjustment mechanism in mid-November this year. At the same time, a proposal to combat circumvention and extend the mechanism’s duration will be submitted for consideration in early December.