EUA prices: The key variable in Europe’s green steel transition

Fastmarkets04-24

Europe’s steel sector is more exposed to carbon pricing than any other major steel-producing region, with EU Allowance (EUA) prices feeding directly into production costs, technology choices and ...

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}\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\">\nEUA prices: The key variable in Europe’s green steel transition\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-04-24 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/eua-prices-the-key-variable-in-europes-green-steel-transition/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Europe’s steel sector is more exposed to carbon pricing than any other major steel-producing region, with EU Allowance (EUA) prices feeding directly into production costs, technology choices and ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/eua-prices-the-key-variable-in-europes-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":"EAF","symbol_name":"Graftech International Ltd.","start_time":0,"source_url":"https://www.fastmarkets.com/insights/eua-prices-the-key-variable-in-europes-green-steel-transition/","article_id":"2629284028","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/eua-prices-the-key-variable-in-europes-green-steel-transition/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2629284028","pubTimestamp":1777003200,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"Few industrial transformations are as exposed to a single policy signal as green steel — where the EUA price can be the difference between a viable business case and a stranded asset.","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"EAF":"Graftech International Ltd.","LU0154245756.USD":"BNP PARIBAS US MID CAP \"C\" (USD) ACC","DRI":"达登饭店","EC":"哥伦比亚国家石油","ETS":"Elite Express Holding Inc.","BK4096":"电气部件与设备","BK4504":"桥水持仓","BK4551":"寇图资本持仓","BK4588":"碎股","BK4232":"货物陆运","BK4209":"餐馆","LU0154245673.USD":"BNP PARIBAS US MID CAP \"C\" (USD) INC","BK4201":"综合性石油与天然气企业","BK4585":"ETF&股票定投概念"},"translate_title":"EUA价格：欧洲绿色钢铁转型的关键变量","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EAF":1,"EC":1,"DRI":1,"ETS":0.85},"content_text":"Europe’s steel sector is more exposed to carbon pricing than any other major steel-producing region, with EU Allowance (EUA) prices feeding directly into production costs, technology choices and capital allocation. Under the EU Emissions Trading System (EU ETS), sustained appreciation in carbon prices materially strengthen the economic case for lower-emission steelmaking routes, accelerating the shift away from blast furnaces toward electric arc furnace (EAF) and hydrogen-based direct reduced iron (DRI) production. The logic runs in both directions: structurally weak EUA prices erode the green premium, delay decarbonization timelines, and extend the operating life of high-emitting assets across the green steel market.\nYet the trajectory is far from assured. The European Commission is actively evaluating ETS reforms aimed at easing price pressures and shoring up industrial competitiveness — interventions that risk anchoring EUA prices at levels insufficient to drive the investment decisions green steel requires. The result is a policy tension at the heart of Europe’s decarbonization agenda: a mechanism designed to price out carbon, potentially recalibrated in ways that blunt its own signal.\n\nWhat EUA price trajectories mean for uropean flat steel market\nEUA price assumptions generate measurable divergence in terms of projections on the future of green steel across production volumes, emissions intensity, and market capitalisation — differences that compound through the early-to-mid 2030s as widening carbon cost differentials begin to structurally reshape cost bases and redirect investment.\nMarket volume impact\nEUA prices carry significant power to reshape the volume composition of the European flat steel market — with hydrogen-based production pathways and conventional blast furnace steel exhibiting the greatest sensitivity to carbon price trajectories.\nUnder a high EUA price scenario, conventional blast furnace volumes contract sharply through 2035, dropping below 50% of market share as early as 2031. Structurally elevated carbon costs act as an accelerant for the lowest-emission production routes, with EAF capacity — particularly when fed by hydrogen-based DRI — steadily capturing share from higher-emitting incumbents.\nA lower EUA price trajectory erodes the competitiveness of low-emission steel and delay the phase-out of blast furnaces. In this scenario, conventional steel retains more than half of total market volume throughout the forecast period.\nHydrogen-based steel production is the most exposed segment, expanding rapidly when supported by strong carbon pricing but facing significant downside risk when ETS cost pressures weaken. \n\n\nImpact on average emission intensity\nIn a high EUA scenario, the accelerating shift from blast furnace-basic oxygen furnace (BF-BOF) output toward DRI-fed EAF production drives a steady and material decline in the weighted-average emissions intensity of European flat steel — a structural improvement that compounds as transition momentum builds through the 2030s. In contrast, weaker carbon price signals relieve decarbonization pressure on blast furnace operators, while EAF producers face diminished incentive to move away from carbon-intensive feedstocks such as pig iron and gas-based DRI. The consequences are quantifiable: a 60% lower EUA price forecast translates into an additional 13 million tonnes of CO₂ from the flat steel sector in 2035 alone¹ — a stark illustration of the environmental cost embedded in a diluted EU ETS.\n\n\n\nMarket capitalisation impact\nEUA price trajectories influence not only volumes, but also the distribution of market value across steelmaking routes.\nIn a high EUA scenario, an increasing share of market capitalisation shifts towards low and near-zero emission steel, reflecting both higher output and stronger pricing support. This underpins the investment case for capital-intensive DRI and EAF projects and links ETS policy directly to long-term decarbonization investment.\nHowever, elevated EUA prices also introduce a structural risk to EU-based production. As carbon costs rise, European producers may increasingly favour imported semi-finished products over domestic steelmaking. Market sources indicate that producing steel within the EU can incur carbon costs of around €150 per tonne under the EU ETS, compared with approximately €30 per tonne under CBAM for imported slab, plus around €20 per tonne in freight. This cost differential creates an economic incentive to substitute domestic production with imports, potentially undermining utilisation rates of EU steelmaking assets.\nAs Fastmarkets reported, in January 2026, EU mills booked over 300,000 tonnes of slab from Brazil.\nConversely, under a lower EUA price scenario, market capitalisation remains more heavily concentrated in conventional steel, as weaker regulatory support limits growth in low-emission and green steel production, slowing the structural rebalancing of the market.\n\n\n\nEU ETS reform: Market Stability Reserve in focus\nDebate around reform of the EU ETS has reintroduced uncertainty into medium-term carbon price expectations, with possible changes to the Market Stability Reserve (MSR) carrying the most immediate implications for near-term supply.\nThe MSR can release credits into the market when supply drops below 400 million Total Number of Allowances in Circulation (TNAC), with proposals to increase this threshold or increase the number of released credits.\nWhilst this may loosen short term supply, long term volumes would still be constricted without further reform. Adjustments to free allocation phase-out and annual Linear Reduction Factor (LRF) are being considered, as these are key drivers of long-term supply tightness.  \n\nImplications for future EUA price trajectories\nThere are reform options available to the European Commission (EC) that could stabilise EUA prices in the long term, as stated in a recent article by our carbon experts, providing greater clarity to long term decarbonization investment decisions. Our low EUA scenario reflects the lower bound of potential policy intervention, assuming structurally lower ETS costs, while our high-EUA scenario follows the current policy trajectory and assumes no material reform.\nIf enacted, measures that suppress EUA prices would have structural implications for the green steel market, delaying decarbonization and undermining the cost competitiveness of low-emission production routes. The European Commission therefore faces a clear trade-off between easing short-term cost pressures on industry and preserving the long-term carbon price signal required to drive investment, with the future makeup of Europe’s steel market at stake.\n\n\n\n\n\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":null,"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"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.1","shortVersion":"4.42.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2629284028","isCrawlerRequest":true}