European decarbonisation: The risks of a stalled transition

Despite the looming approach of Europe’s Carbon Border Adjustment Mechanism (CBAM) and the associated scale-back of the free allocations under the Emission Trading Scheme (ETS), the green steel transition in Europe seems to be stumbling at the final hurdle. The past months have seen several announcements of delays from major European steelmakers, citing economic difficulties and a lack of clarity around the effectiveness of support measures to be offered by European governments. Why is this happening, and what can we expect from European decarbonisation over the next years? In this Insight, we examine the motivation behind the green transition, the challenges facing steelmakers, and the solutions they may choose to enact.