What a softer EU ETS trajectory means for the green steel transition

Fastmarkets

Aug 04

Fastmarkets’ forecasts reveal how dramatically a reassessment of EU carbon prices could change the outlook for low-emissions steel. A softer path for the ETS market, now reflected in the European ...

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One of the best stock trading platforms in Singapore.","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.0a0bd8dc.png","ogUrl":"https://www.itiger.com/news/2656255452"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"SGP","license":"TBSG","edition":"fundamental"},"isCrawlerRequest":true,"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2656255452\",edition:\"fundamental\",auth_exemption:1,,,undefined,":{"share":"https://ttm.financial/m/news/2656255452?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-08-04 12:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2656255452","market":"us","top_or_hot":-1,"title":"What a softer EU ETS trajectory means for the green steel transition","media":"Fastmarkets","content":"<div>\n<p>Fastmarkets’ forecasts reveal how dramatically a reassessment of EU carbon prices could change the outlook for low-emissions steel. A softer path for the ETS market, now reflected in the European ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/what-a-softer-eu-ets-trajectory-means-for-the-green-steel-transition/\">Source Link</a>\n\n</div>\n","source":"fastmarkets_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>What a softer EU ETS trajectory means for the green steel transition</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhat a softer EU ETS trajectory means for the green steel transition\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-08-04 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/what-a-softer-eu-ets-trajectory-means-for-the-green-steel-transition/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Fastmarkets’ forecasts reveal how dramatically a reassessment of EU carbon prices could change the outlook for low-emissions steel. A softer path for the ETS market, now reflected in the European ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/what-a-softer-eu-ets-trajectory-means-for-the-green-steel-transition/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SLX","symbol_name":"VanEck Steel ETF","start_time":0,"source_url":"https://www.fastmarkets.com/insights/what-a-softer-eu-ets-trajectory-means-for-the-green-steel-transition/","article_id":"2656255452","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/what-a-softer-eu-ets-trajectory-means-for-the-green-steel-transition/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2656255452","pubTimestamp":1785816000,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"The European Commission’s proposed reforms open a lower EUA price pathway, with consequences for cost parity, production volumes and emissions. In Fastmarkets’ latest Green Steel Market Outlook, a policy moderation scenario models the impact of a softer carbon price on the green steel transition in Europe.","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SLX":"VanEck Steel ETF","ETS":"Elite Express Holding Inc.","EPV":"ProShares UltraShort MSCI Europe","BK4232":"货物陆运","BK4156":"煤与消费用燃料"},"translate_title":"更柔软的欧盟排放交易体系轨迹对绿色钢铁转型意味着什么","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ETS":1.5,"SLX":1.5,"EPV":0.65},"content_text":"Fastmarkets’ forecasts reveal how dramatically a reassessment of EU carbon prices could change the outlook for low-emissions steel. A softer path for the ETS market, now reflected in the European Commission’s latest review proposal, would mean very different cost pressures for European steelmakers. That would alter the balance between blast furnaces and lower-emissions routes, including new EAF-based capacity. The outcome of the ETS legislative process could therefore become one of the most important factors shaping European steel prices and investment decisions over the next decade.\n\nCarbon price is becoming steel’s decisive cost variable\nThe EU Emissions Trading System is expected to be the most important long-term driver of cost convergence between conventional and lower-emission steel production. As free allowances are phased out, BF-BOF producers will become increasingly exposed to the full cost of their emissions. \nDomestic steelmakers also face indirect exposure through carbon costs embedded in electricity prices and imported feedstocks, while CBAM is extending the influence of EUA prices to foreign producers selling into Europe.\nUnder Fastmarkets’ base scenario following legislation currently in force, EUA prices reach above €200[1] by 2035. Direct carbon costs for conventional BF-BOF production could consequently approach €450/tonne, compared around €40/tonne for an integrated hydrogen-based DRI-EAF producer. This difference would materially reshape the relative competitiveness of steelmaking technologies during the 2030s.\n\n\nCommission proposal moves policy towards moderation\nThe Commission’s proposed EU ETS review, however, points towards a more gradual tightening of the EU carbon market after 2030. The package would reduce the Linear Reduction Factor to 3.7% in 2031-35 and 1.7% from 2036, alongside reforms to the Market Stability Reserve intended to improve liquidity.\nFor CBAM-covered sectors including steel, the proposal would also extend the withdrawal of free allocation, while making continued allocation more conditional on investment in European decarbonisation. These measures are not yet law and do not determine a future EUA price. They do, however, strengthen the case for considering a wider range of policy outcomes.\nFastmarkets has developed four EUA scenarios to capture this wide range of potential policy and market outcomes. These include three scenarios of fundamentals-driven forecasts based on existing EU policy, without yet factoring in proposed changes.\nUnder these scenarios, allowance supply becomes structurally tight from2030. As said, this would push EUA prices close to the mid-€200s/tonne by 2035 in our base case scenario. In our low scenario for existing policies, prices would still go above €150 per tonne, while in our high scenario they would climb above €250. In all three current-policy cases, allowance supply tightens materially from 2030.\nIn addition, we have developed a “policy moderation” scenario, which we test a market in which intervention limits real carbon-price growth to 50% above 2025 levels – reaching €110 per tonne in 2035. This represents the competitiveness pressure put on the Commission from industry, although it should not be taken as a forecast of the final legislation.\n\nA softer trajectory will delay green steel cost parity\nUnder the base scenario of current EU ETS policy, conventional BF-BOF costs rise sharply from 2030 as free allowances phase-out intensifies.  By 2032, BF-BOF production costs are expected to exceed natural gas-based DRI-EAF facilities, with hydrogen-based production achieving cost parity in 2035.\nExplicit green premiums therefore disappear across all emission buckets by 2035. This does not mean that lower-emission production becomes less valuable. Rather, its underlying production cost falls below conventional steel, allowing EAF producers to achieve higher margins without charging an additional premium.\nNatural gas-based DRI-EAF production is expected to generate the strongest margins on the current ETS trajectory, with costs projected to be 6% lower than prices in 2035, without any green premium. It combines lower emissions exposure with input costs below those of hydrogen-based production.\nThe Commission’s proposed ETS reform, however, would push these parity points further into the future. Under Fastmarkets “policy moderation” scenario of lower EUA prices, conventional steel remains cheaper for longer. Near-zero producers continue to command a premium, but margins are lower and significantly more dependent on buyers’ willingness to pay or supportive public procurement policy.\n\n\n\n\nA moderated ETS path slows the shift in output\nThe divergence in EUA prices produces an equally significant difference in forecast production. Combined volumes for low and near-zero emissions steel (<0.8tCO2e) are 48% lower in a potential policy moderation scenario, as appetite for decarbonised steel is currently insufficient to offset the cost disadvantage relative to conventional steel.\nHydrogen-based DRI-EAF production shows the greatest sensitivity to this change. Its forecast output under policy moderation is 63% below the current trajectory outcome on 2035. Conventional production moves in the opposite direction, retaining a significantly larger share of the European flat steel market.\n\n\n\nEurope faces a decarbonization and competitiveness trade-off\nMaintaining the existing ETS trajectory would provide the strongest investment signal for lower-emission steelmaking. Under Fastmarkets’ current-policy base case, average emission intensity of European steel consumption falls 27%from 2026-2035, whereas under a theoretical policy change, this drops to just 18%.\nHowever, the same trajectory places greater cost pressures on conventional steelmakers and downstream consumers. Conventional HRC prices rise over 100% more to 2035 under a current trajectory compared to a policy moderation scenario. This creates a risk that rapid decarbonisation is accompanied by lower domestic competitiveness, reduced production or greater reliance on imported semi-finished material.\nPolicy changes may ease some of these pressures and preserve a larger share of conventional production. But they would also reduce the commercial incentive to operate new EAF capacity using the lowest-emission feedstock, delaying investment decisions and disrupting existing projects.\nThe Commission has proposed measures intended to address this risk, establishing a €100 billion Industrial Decarbonisation Bank, beginning with an Investment Booster backed by 400 million allowances. Continued free allocation would also become more closely conditional on investment in European decarbonisation.\nThese policies seek to compensate for a weaker carbon-price incentive with direct financial support and stronger investment incentives. This could potentially help announced DRI-EAF and hydrogen projects proceed even if EUA prices rise more slowly, although this would still depend on expected operating costs and demand for lower-emission steel.\nWhether this approach delivers both competitiveness and decarbonisation will depend on the final legislation and allocation of funding. Until those details are agreed, Europe’s green steel market will continue to face a wide range of possible outcomes.\n[1]All prices are in real 2025 Euros.\n\n\n\n\n\nForecast green steel premiums to 2035\nScenario-based forecasts across six emissions intensity bands, built to inform procurement, investment, and decarbonization planning\n\nRequest access","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}