Cost of steel with CBAM and ETS, EUR/t HRC

Annual modeled production costs in 2026 EUR with annual projected carbon costs added on top. All locations in MENA unless noted as in EU.

H2 = renewable hydrogen. NG = natural gas. CCS = carbon capture and storage. PPA = renewable power purchase agreement. EU scenarios include ETS and MENA scenarios include CBAM. EU BF-BOF based on Germany, EU H2 DRI low estimate based on ideal renewable energy locations within EU and optimistic capital costs, EU H2 DRI high estimate based on pessimistic renewable energy locations and high capital costs. All scenarios use 20% scrap. Natural gas DRI prices are reflective of lower-end natural gas prices in the MENA region at approximately $0.5/GJ. EU H2 DRI options assume 100% renewable energy use. MENA grid intensity of 0.63 kg CO2/kWh used and methane leakage for GWP-20 included, assuming 2.2% leakage rate. All production costs include cost of metallics, energy, O&M, transport, and capital, with 2% annual inflation applied to input and labor costs. For capital costs, BF-BOF assumed as fully depreciated (i.e. no capital costs), while hydrogen, DRI, and EAF buildout modeled as annual costs accounting for annual depreciation and interest. Production costs in Net Present Value in 2026 EUR.
Chart: RMI graphicSource: RMI analysis.