22 September 2025 – With less than four months to go before the start of the EU Carbon Border Tax CBAM, important information is still missing. Instead, more and more rumours and half-truths about CBAM are spreading in the market. Time for a few facts on the matter. Iron ore prices rise, Chinese steel demand in the domestic market picks up.
Iron ore prices rise on stronger demand
Iron ore prices continued to climb on Monday. In particular, spot market prices in China improved by between 1.0 and 2.3%. The background is growing demand for steel products in the Chinese domestic market, which has recently also led to a noticeable increase in the capacity utilisation of blast furnaces there.
CBAM: Rumours, half-truths and a few real facts
With less than four months to go before the start of the EU Carbon Border Tax CBAM, important information is still missing. A failure that can be attributed solely to the European Commission. On the one hand, because the EU Green Deal, and therefore CBAM, was introduced hastily and with a more than inadequate timetable. But possibly also because there is otherwise no idea for an effective successor instrument to the EU safeguard measure on steel, which expires in mid-2026.
Better facts than fiction on CBAM
The fact is that the important benchmark and default values for calculating CBAM costs have not yet been published by the European Commission. In addition, three EU public consultations are currently ongoing, dealing with direct embedded emissions, the phasing-out of free EU ETS allocations, and a potentially paid CO2 price in third countries.
In recent weeks, rumours and half-truths about CBAM and the design of the missing values have multiplied. One might think everyone wants to chip in, no matter how far-fetched, as long as their own name is not mentioned in connection. Thus, it is consulting firms, market sources, or the EU steel producers themselves who are quoted by the usual industry media. No matter how absurd the claims may be.
In particular, one might suspect employees of domestic steel producers of deliberately spreading exaggerated rumours in order to create uncertainty in the market. One only has to recall the statements from the camp of a Northern European stainless steel producer, which ahead of the last safeguard review spread a completely different result for stainless flat products than eventually came out.
The problem with the benchmark values
For more than a decade there have been only 54 EU ETS benchmark values. These benchmark values are assigned only to individual production steps. They therefore cannot be transferred one-to-one to CBAM, since in CBAM the benchmark values must be aligned with the respective CN codes.
Example: Hot metal is not hot rolled coil
For example, there are EU ETS benchmarks for the production steps hot metal, EAF carbon steel and EAF high-alloy steel. For hot metal, however, the benchmark value applies only to what comes out of the blast furnace – not to the finished hot- or cold-rolled product, produced via the route blast furnace, BOF, hot rolling mill, cold rolling mill.
For the production steps after “hot metal” there have so far been no EU ETS benchmark values. The same applies to the two EAF routes. For the Direct Reduced Iron (DRI) route, there are not even EU ETS benchmark values at all – these are only to be introduced with the EU ETS Phase 2026-2030.
So if someone claims that CBAM benchmark values for the blast furnace route would be 1.3 tCO2 per tonne of steel and those for EAF 0.2 tCO2, this leaves out all other production steps after the liquid pig iron or crude steel.
Commission missing up to 1,800 values for CBAM
The Commission must therefore develop not only 600 default values and 600 benchmark values for the approximately 600 CN codes covered by CBAM, but theoretically also 600 new EU ETS values. An immense challenge which has been known to the Commission since at least 2021, but where it has (wilfully?) let things slide and, despite two CBAM expert groups, has so far presented no results.
CBAM timetable completely disrupted
In several statements from the Commission available to us, including from Wopke Hoekstra, European Commissioner for Climate, Net Zero and Clean Growth, it emerges that CBAM benchmark values are not expected until the revision of EU ETS values has been completed in spring 2026. The result of the EC study on default values is likewise not expected before mid-2026.
It is therefore urgently time for the Commission to face reality and postpone the introduction of CBAM, rather than continuing to distract from the fact that it will not be ready in time for the start.
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