Julius said the steel sector is facing an unprecedented regulatory burden, which could accelerate deindustrialisation in Europe.
He said the new calculation factors published by the European Commission in December 2025 — running to more than 1,600 pages — caught many companies unprepared for CBAM compliance starting on 1 January 2026. Julius added that most importers only began reviewing the documents once offices reopened on 5 January, and that disruptions were felt across the supply chain. According to him, the fact that none of these costs were anticipated in contracts signed in 2025 has left companies facing “extreme cost surprises.”
The challenges related to CBAM implementation coincided with the European Commission saying it was considering suspending requirements for the agricultural sector just two weeks after enforcement began. Following strong pressure from European agriculture ministers, EU Commissioner Maroš Šefčovič said fertilizer tariffs could be reduced and certain CBAM provisions could be temporarily suspended. Julius said the steel sector is likely to exert similar political pressure, arguing that steel-based products manufactured in the EU would face cost increases so high that they would no longer be able to compete with imports from outside the bloc.
Julius added that the new regulations are affecting not only imports but also domestic production and exports within the EU. He warned that rising costs would also reduce exports of EU-produced steel products, with the logical consequence being accelerating deindustrialisation in Europe. Julius said several manufacturing companies have already started reporting these risks.
Among the technical problems in CBAM implementation, Julius pointed to serious errors in the default values. Steel trading company Gerber Steel formally warned the European Commission that there are major inconsistencies in the default emission values for Taiwanese stainless steel products, adding that the figures appear to have been “copied from other sources” rather than based on country-specific data. Julius described the default-value system as “a mystery” and argued that it was put together in a rush to meet the 31 December 2025 deadline rather than through proper data-driven analysis.
Certification is also creating additional bottlenecks. Julius said that certification bodies responsible for verifying plant-level emissions under CBAM will not be accredited by national accreditation authorities until July 2026. As a result, there will not be enough certified bodies to verify thousands of facilities, creating a serious bottleneck. This will force many importers to rely on default values, which are higher than actual emissions, further increasing compliance costs. Julius said the European Commission’s “unrealistic timeline” is effectively pushing importers toward the most expensive compliance option.
Meanwhile, EU-based steel producers could benefit from higher import costs. Julius said producers within the EU may find themselves in a more favourable position as imports weaken due to rising costs.
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