Steel produced in the EU with ETS, EUR/t HRC

Annual modeled production costs in 2026 EUR with annual projected ETS costs added on top

H2 = renewable hydrogen. NG = natural gas. All DRI routes modeled with EAF steelmaking. Scrap charge is assumed to be 20% unless otherwise noted. NG DRI and BFBOF modeling based on operating costs for Germany. H2 DRI low estimate based on ideal renewable energy locations within EU and optimistic capital costs. H2 DRI high estimate based on pessimistic renewable energy locations and high capital costs. 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.