12 May 2026 – CBAM: the bureaucratic monster is set to keep growing, while an expansion of EU steel tariffs is already being demanded. Who pays the bill in the end? Global steel production at the limit: the overcapacity fairy tale is collapsing further and further in on itself.
CBAM, Steel Tariffs, Lobbyists: Who Pays the Bill in the End?
The CO2 tax CBAM has now been in force for 20 weeks, and yet the nearly 3,000-page bureaucratic monster is still not finished, remains full of errors, and the calculation of CBAM costs arising on import is still more of a rough rule-of-thumb game.
CBAM: The Bureaucratic Monster Keeps Growing
Nevertheless, the European Union is already actively working on extending CBAM to downstream products, which could easily add another 1,000 pages and impose an immense and costly burden on several thousand small and medium-sized enterprises dependent on imports.
The fact that it is primarily downstream products made of steel and aluminum that are to be integrated into CBAM also means that this is not about fairness or a level playing field – but about yet another pure trade defence measure, which Brussels has, for appearances’ sake, squeezed into a pretty green outfit.
Protection from Competition – or from One’s Own Association?
At the same time, associations are demanding that the EU safeguard successor, expected to start on 1 July 2026 with its 50% tariffs and massive quota reductions, be extended to downstream steel products.
Even the simultaneous application of CBAM and steel tariffs in their current form is already leading to an artificial increase in price levels in the EU, which the manufacturing sector and consumers will have to pay for. Worse still, these poorly thought-out demands have serious consequences for the competitiveness of Europe’s export-oriented economy.
Because every additional euro that has to be spent on production costs in mechanical engineering or metal processing in the EU creates, with a view to the important U.S. market and its tariffs on steel and steel derivatives, a further competitive disadvantage of EUR 1.50 – while other countries can use this European weakness to their own advantage.
One Question Remains Unanswered
How associations that are actually supposed to protect their member companies from such price explosions and competitive disadvantages can now run large-scale campaigns in favour of expanding CBAM and steel tariffs is completely incomprehensible to us. And one important question remains unanswered, as always: who, in the end, is still supposed to be able to afford all those overpriced products Made in Europe?
Global Steel Production at the Limit: The Overcapacity Fairy Tale Is Collapsing
We very much welcome the fact that an NGO has begun to reflect the realities of global steel production – and in doing so has simultaneously confirmed what we have been saying for some time: global steel production is running at full throttle and close to maximum capacity utilization.
What the Data Really Say
“Global capacity utilization: Due to maintenance, repairs, and other shutdowns, actual production is always lower than installed capacity. Steel plants need to operate in the range of 80 – 90% capacity utilization to remain profitable.”
Crude Steel Capacity Utilization at 90%
Based on the data collected by GEM, global capacity utilization in steel production excluding China is at least 90%. If the production outages mentioned in the report are added to this, it should be clear that production is running at the limit.
This stands in complete contrast to the justifications being circulated by EUROFER and others about the urgency and importance of European market protection measures. The bogeyman of alleged overcapacity simply does not exist and once again shows that lies fundamentally stand on feet of clay.
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