Blast furnace, DRI or scrap: why the steel route sets the price

Steel is 73.8 Mt of the EU’s CBAM imports and €11.4 bn of the 2026 default-value exposure. More than for any other good, the CBAM cost of steel depends on how it was made — and the rules encode that in a set of letters.

Routes C to J

• C — carbon steel, blast furnace / basic oxygen furnace. Iron ore reduced with coke; the most carbon-intensive mainstream route.
• D — carbon steel, direct reduced iron / electric arc furnace. Ore reduced with gas (or, in future, hydrogen) and melted electrically.
• E — carbon steel, scrap / electric arc furnace. Recycled scrap melted with electricity; the lowest direct emissions.
• F, G, H — low alloy steel on the same three routes.
• J — high alloy steel, made in electric arc furnaces.

For hot-rolled flat steel the default benchmark is 1.370 tCO₂e per tonne on route C, 0.481 on D and 0.072 on E. The benchmark sets the free allocation adjustment: the lower it is, the more of the product’s emissions the importer pays for.

Which route applies

When an importer uses default values, the route is not a choice: the default value table names one for each country and product, and the matching benchmark must be used. For most countries the steel defaults point to route C. When an importer uses actual data, the real route of the installation counts, and the adjustment is built from the process benchmark plus the precursors.

A scrap-based mill has low emissions but also a low benchmark, so its advantage shows up in actual data, not in the defaults.

Who ships the steel

Large volumes from Canada, Ukraine and Brazil are mostly iron ore pellets, which is why their exposure per tonne is low. For finished and semi-finished steel, see the country pages for China, India and Türkiye.