The cost case against green steel is eroding
CBAM is pushing the carbon cost on conventional steel toward the green premium. Price convergence still does not build capacity.
Open the document (PDF)The cost case against green steel is eroding, and carbon border pricing is doing the work. As CBAM phases out free allocation through 2034, the carbon cost on conventional steel is climbing toward $100 to $200 a tonne, converging on the $150 to $300 green premium.
Price convergence, however, does not build capacity. Producers need firm offtake before they will invest, and buyers need a claimable reduction before they will pay more. Neither side moves first.
Insetting resolves the standoff: buyers co-fund verified green capacity and take an allocated share of the reduction as a Scope 3 claim, giving producers the forward demand to build.
Originally published on LinkedIn, 23 July 2026.
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