Outokumpu, SSAB, Salzgitter, Saarstahl, Dillinger and SHS – Stahl-Holding-Saar have issued a joint declaration linking industrial decarbonisation investment plans to the EU’s ETS1 and CBAM framework. The statement was presented at the European Parliament on June 30, 2026. The companies said their more than €10 billion cleaner steelmaking programme depends on long-term regulatory certainty.
The producers said weakening the carbon market would shift rewards toward firms that delayed decarbonisation while disadvantaging companies that invested earlier. They also argued that predictable policy conditions are required for projects with multi-decade operating lifespans. The declaration set out specific requests covering emissions trading settings, border adjustment implementation and market stability provisions.
ETS1 settings and CBAM implementation priorities
The steelmakers called for the ETS1 Linear Reduction Factor to remain at 4.4% until at least 2035. They said future ETS reforms should be aligned with the EU’s 2040 climate targets. The group also urged policymakers to preserve the current CBAM implementation schedule.
In addition, the companies asked for maintenance of the existing free allocation phase-out and protection of the Market Stability Reserve. They said the combination of these elements is needed to support investment decisions for technologies including electric arc furnaces (EAFs), hydrogen-ready direct reduced iron (DRI) plants and energy-efficiency upgrades. They also cited large-scale facility modernisation as requiring stable carbon pricing.
Carbon pricing as a factor in investment and competitiveness
The declaration describes EU carbon market policy as connected to industrial competitiveness and capital allocation rather than environmental policy alone. The steelmakers said investment choices depend on several linked factors, including long-term carbon price certainty and demand for low-carbon steel. They also listed affordable electricity, reliable renewable energy supplies and grid infrastructure.
The companies said protection against carbon-intensive imports is another element affecting investment decisions. They stated that Europe’s competitive disadvantages are driven by high electricity prices, continued dependence on fossil fuels, infrastructure bottlenecks and global steel overcapacity rather than by carbon pricing itself.
CBAM scope, thresholds and concerns over downstream coverage
The steel industry highlighted CBAM’s definitive phase in 2026 following a transition period from 2023 to 2025. The mechanism applies carbon pricing to imports of iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. Importers above a 50-tonne threshold are required to obtain authorised CBAM status, purchase CBAM certificates and declare verified embedded emissions.
While supporting CBAM, the companies warned that loopholes could weaken its effectiveness. Their stated priorities include expanding CBAM coverage to downstream steel-intensive products, preventing circumvention before it becomes widespread, and creating a permanent export solution for EU producers. They said downstream manufactured goods represent a major gap in current coverage.
The declaration says that without broader CBAM coverage production could shift from primary steel covered by the mechanism to finished products such as machinery, industrial components, household appliances, construction products and metal-intensive equipment. It added that many of these finished goods face less stringent carbon requirements under current arrangements. The companies said this could allow imported finished products to avoid carbon costs while European manufacturers continue paying higher compliance expenses.
Procurement changes and reporting expectations for exporters
The steelmakers said evolving regulatory requirements are changing procurement strategies across Europe. Manufacturers increasingly assess steel suppliers using three criteria: the market price of steel, the product’s embedded carbon emissions and regulatory carbon costs associated with imports. They said a credible ETS-CBAM framework enables buyers to compare European low-emission steel with imported materials backed by verified emissions data.
The declaration also addressed producers outside the EU, including exporters from the Western Balkans and Turkey. It said future access to European supply chains will require more than annual emissions reporting. Companies will increasingly need plant-level embedded emissions data, product-specific emissions calculations and precursor material tracking.
The statement further listed electricity sourcing documentation and robust monitoring, reporting and verification (MRV) systems as requirements. It also referenced evidence of domestic carbon pricing where applicable and comprehensive audit trails. The companies said businesses able to provide accurate independently verified emissions data would gain an advantage over firms relying on generic estimates or incomplete documentation.
Export competitiveness, ETS revenue use and regional implications
A key concern raised by the producers was the absence of a permanent solution for EU steel exports. They said European producers continue paying carbon costs when competing internationally where many rivals face no equivalent obligations. Without an effective export mechanism, they stated low-carbon investment would depend heavily on EU demand and customers willing to pay a premium for greener products.
The companies called for ETS revenues to be redirected toward industrial decarbonisation projects. They said modernising Europe’s steel industry requires enormous capital investment and cited examples including EAFs needing high-quality scrap supplies, stable electricity and stronger grid infrastructure. They also referenced hydrogen-based DRI plants requiring hydrogen production, storage and transportation networks.
The declaration added that integrated steelworks modernisation involves advanced technology plus lengthy permitting procedures and extended construction timelines. It said redirecting ETS revenues back into CBAM sectors could reduce financing gaps while maintaining a carbon price signal intended to encourage long-term investment.
The ETS-CBAM framework was described as having implications for Serbia and wider Southeast Europe (SEE). The companies said exporters of steel, aluminium products, electricity-intensive materials or downstream manufactured goods into the EU will compete based on carbon performance and data transparency. They also noted that renewable electricity, Guarantees of Origin, advanced metering systems and CBAM-ready documentation may become valuable elements in industrial supply contracts.
CBAM compliance as due diligence across supply chains
The declaration described CBAM as evolving beyond customs into a broader system of industrial due diligence. It said importers will require more comprehensive supplier disclosures while financial institutions will increasingly evaluate carbon-cost exposure. Buyers are expected to negotiate contractual rights covering emissions data, verification procedures and liability for inaccurate CBAM declarations.
Engineering firms and technical advisers were also identified as playing a growing role by integrating manufacturing processes, energy sourcing, metering systems, ERP systems and EU reporting requirements into a single verifiable compliance framework. The companies linked their announced low-carbon investments of more than €10 billion to maintaining a stable ETS1 setting, strengthening CBAM measures and preventing carbon leakage.
The statement further tied its investment outlook to introducing an effective export mechanism and recycling carbon market revenues into industrial transformation as Europe accelerates cleaner manufacturing efforts.