The European Union’s Carbon Border Adjustment Mechanism (CBAM) entered its full implementation phase on January 1, 2026, imposing carbon costs on imports of high-emission products such as cement, steel, and aluminum. For Europe’s steel industry, 2026 is seen as a pivotal year as producers accelerate decarbonisation investments to remain competitive in a carbon-priced market.

Several major projects are advancing across the region, centered on low-emission direct reduced iron (DRI) routes that avoid coking coal and rely on green hydrogen or alternative low-carbon reductants. 

Sweden’s GreenIron is preparing to start up a small-scale green-hydrogen DRI facility, while Stegra targets production in 2026 with a 2.1 million-ton DRI plant. 

Spain’s Hydnum Steel, Germany’s thyssenkrupp and Salzgitter, and Tata Steel Netherlands are also progressing large-scale DRI-based green steel projects, with start-ups ranging from 2026 to the mid-2030s.