7 July 2025 – With its proposals to extend climate targets until 2040, the Commission has also made it clear that it does not intend to subsidise CO2-intensive CBAM exports from Europe. France calls important trading partners ‘thugs’ and demands more tariffs. Is green steel now economically viable or not? Or only on condition of compulsory purchases by the state through green lead markets?
France calls important trading partners ‘thugs’
French Finance Minister Eric Lombard called for new tariffs against China last Saturday after French pride was hurt by Chinese tariffs on cognac (wine spirits). In the same breath, Lombard described the US and its tariff policy as ‘thugs’, according to press reports. Previously, the EU had imposed punitive tariffs on Chinese electric cars and excluded Chinese companies from public tenders in the medical sector.
Whether it was really expedient to describe the negotiating partner as a crook in an open tariff dispute that would hit the European Union harder than the United States is something the French government will ultimately have to answer for.
France, which is subject to EU deficit proceedings due to its immense national debt and has no real vibrant corporate culture of small and medium-sized enterprises apart from state-owned companies, repeatedly stands out with ill-considered demands for new tariffs to protect its ailing corporations.
To our great regret, this lack of understanding and interest in small and medium-sized enterprises can also be observed on the part of French EU parliamentarians. In the end, tariffs harm the countries that impose them. This was recently reiterated by US Federal Reserve Chairman Jerome Powell.
Commission: No CBAM subsidies for CO2-intensive EU exports
The European Commission has rejected calls for subsidies for CO2-intensive exports from the European Union. It has made this clear once again in its proposal to supplement the climate targets for 2040.
Steel association loudly calls for CBAM export incentives
EU steelworks and their lobby association EUROFER in particular are repeatedly calling for their steel products to be reimbursed for CO2 costs paid in Europe when exported. However, this would mean that CO2-intensive products from Europe would be primarily exported and subsidised, and there would therefore be no reason to reduce GHG emissions.
Instead of steel: EU steel makers prefer to sell CO2 certificates
EU steel makers are already indirectly subsidised with 1.5 times their CO2 emissions through the free allocation of EU ETS certificates. In 2023, for example, this led to windfall profits of more than €3 billion for the mills.
Since the end of 2021, prices for EU ETS certificates have averaged well above EUR 70 per tonne. Since then, domestic steel makers have continuously reduced their production volumes and prefer to earn their money by selling surplus free CO2 certificates.
Is green steel now economical or not?
After the steel group ArcelorMittal abandoned its plans to produce green steel in Europe for ‘economic’ reasons, the management of Saarstahl and Dillinger Hütte emphasised that the companies were on track with the production switch to co2 reduced steel and saw long-term advantages for the group in the sale of green steel.
Green hydrogen not sufficiently available
The fact that, despite numerous claims to the contrary, there will not be enough clean hydrogen available in Germany and Europe in the foreseeable future was, of course, ignored. Instead, the companies are now talking about CO2-reduced production. In addition, a significant portion of the hydrogen for the steelworks in the German state of Saarland is to be imported from France – which, at least so far, is not considered particularly green.
In recent months, steel makers have repeatedly complained that the production of green steel from clean hydrogen would not be economically viable and that green lead markets – i.e. a planned economy – would be needed to generate sufficient demand for CO2-free steel.
And it was only at the end of June 2025 that the Social Democrats of the SPD in Saarland realised that there was a problem with the availability of green hydrogen. According to press reports, the local SPD said, among other things: ‘The transformation of the Saarland steel industry is built on shaky foundations. Where will the hydrogen needed in large quantities come from? How can the more expensive climate-neutral steel remain competitive?’ The Saarland SPD is now once again calling on the German federal government to hold a steel summit.
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