14 September 2026 – On Tuesday, the European Parliament will vote on expanding the CBAM carbon tax. That this could trigger an compliance cost explosion for many small and medium sized enterprises appears to be something the EPP and S&D would rather ignore. German production of hot rolled steel products has risen significantly. Why is the German steel association keeping quiet about this success?
Germany: Production of Hot Rolled Steel Products Rises Significantly
The German Steel Federation published its latest figures for steel production in Germany last week. While the association continues to blame weak demand for low crude steel production, important indicators are being completely ignored.
One example is steel production via the electric route. Based on the figures currently available, total production in 2026 is on course to exceed the level recorded in 2025. Compared with July 2023, electric steel production has also increased by more than 22 per cent. Something the association attempts to portray in a very different light in its press release.
Production of Hot Rolled Steel Products Rises Significantly
The most important indicator, production of hot rolled products, is once again completely ignored by the German steel association. Yet the latest figures, extrapolated across the full year 2026, show that German steelmakers could produce almost 32 million tonnes of hot rolled products, the highest level since 2023.
Why such a success for the German steel industry receives no mention at all is likely to have political reasons. After all, steel producers are trying to extract as many billions in taxpayers’ money and concessions as possible from the federal government, the German states and the European Union.
Cost Explosion Looms: EU Parliament Votes on CBAM Expansion
The European Parliament will vote on Tuesday, 15 September 2026, on expanding CBAM to downstream products. Originally, just under 200 products were expected to be affected by the expansion. Parliament and Council have since made extensive additions, expanding the product list to more than 400.
Efforts to exempt certain peripheral EU regions from the measure, or to reduce the 50 tonne threshold for aluminium to just five tonnes, are unlikely to have much chance of success overall. The CBAM measure could also become vulnerable to legal challenge if individual products are treated differently.
CBAM Expansion Will Be Expensive for EU Companies
Most recently, Parliament, led by the EPP and S&D, has shown itself open to extending CBAM to downstream products. The fact that this would impose a substantial additional workload, higher costs and even more bureaucracy on small and medium sized enterprises appears to be something the centre-left groups in the European Parliament continue to ignore completely.
The almost 4,000 pages of existing CBAM rules could then be joined by several thousand more, finally reducing an already barely comprehensible monstrosity of bureaucratic insanity to complete absurdity. Even today, a single SME can already spend several tens of thousands of euros per year on CBAM reporting alone. And that does not include the cost of CBAM certificates.
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