[SMM Stainless Steel Flash] EU ETS Reform: Protecting Big Steel's Balance Sheets While SMEs Bear the Burden

Published: Jul 21, 2026 09:44

Save

The EU Commission's latest ETS reform proposal (COM(2026) 616), presented as a competitiveness measure, adds further layers of funds, investment conditions, and reporting obligations on top of already complex ETS and CBAM rules without meaningful simplification. Free allocation for CBAM sectors is extended to 2038, while historic certificate surpluses accumulated by the steel industry remain entirely untouched — allowing European producers to meet current obligations with previously free-allocated certificates while importers must provide upfront CBAM capital. SMEs appear in funding programs but receive no exemptions or reserved quotas. The case of Saarstahl illustrates the asymmetry: the company benefits simultaneously from historic ETS surpluses, extended free allocation, decarbonisation subsidies, CBAM border protection, and steel tariffs, with over half of its EUR 4.6 billion hydrogen investment publicly funded. Meanwhile, Germany's 2026 industrial electricity price of around 16.7 cents/kWh has returned to 2014 levels, undermining the steel industry's persistent claims that energy costs are the sector's primary burden.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

Data: SHFE, DCE market movement (Jul 21)

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 21 Jul , 2026

2 hours ago

4 hours ago

Bullish and Bearish Expectations Clash in High-Grade NPI Market Amid Price Disconnect

[SMM Nickel Flash] July 21 News: Today, bullish and bearish expectations in the high-grade NPI spot market diverged markedly. Downstream generally held a wait-and-see attitude and pushed for lower prices, while most suppliers held prices firm. The price disconnect between upstream and downstream persisted.

4 hours ago

SMM Nickel Flash: High-Grade NPI Sentiment Rises Slightly in July

[SMM Nickel Flash] July 21 news, SMM high-grade NPI market sentiment factor was 2, up 0.01 MoM, high-grade NPI upstream sentiment factor was 2.07, flat MoM, high-grade NPI downstream sentiment factor was 1.94, up 0.03 MoM.

4 hours ago