Chinese steel shipments to the European Union increased in the first half of 2026 even as overall EU steel import demand weakened. Maintaining that growth will depend on emissions verification, product requirements and access to tariff quotas as European carbon and trade measures reshape import economics.
According to EUROFER, Chinese deliveries of finished steel to the EU rose 40% year on year during the first six months of 2026. China accounted for 12.3% of EU finished-steel imports by volume.
Separate Eurostat data covering the broader HS 72 category show China’s share of EU steel import value increasing from approximately 5% in 2021 to 11% in 2025. The two indicators measure different aspects of trade and should not be combined into a single statistical series.
Production routes and emissions data shape competitiveness
Chinese producers supply European customers across flat steel, coated sheet and specialised downstream materials. Manufacturing scale and industrial integration can influence production costs, but the emissions intensity of individual products depends on the installation, fuel consumption, production route and precursor materials used.
Customs origin alone does not establish the emissions associated with a tonne of steel. Products originating in China may come from different production routes, including blast-furnace steelmaking and electric-arc production, each with its own emissions profile.
Under the EU Carbon Border Adjustment Mechanism (CBAM), importers can apply European Commission default values in accordance with the applicable rules or seek to establish emissions using verified actual data. The choice affects the calculation of embedded emissions and the resulting carbon liability.
For a representative hot-rolled steel classification, published calculations based on third-quarter 2026 default values indicate a materially higher illustrative carbon cost for Chinese steel than for comparable Turkish or Serbian material. This comparison is not a national average for Chinese steel. It highlights the potential importance of installation-specific emissions data, applicable production benchmarks and deductions for carbon costs already paid.
EU steel safeguards increase import costs
Carbon-related obligations represent only one component of the competitive challenge facing Chinese exporters. A separate EU steel trade measure, applying from July 2026, establishes approximately 18.3 million tonnes of annual tariff-free import quotas and a 50% duty on imports exceeding the applicable quotas.
The allocation of quota volumes by product and country of origin, alongside requirements for origin traceability, can materially affect the final cost of imported steel. A modest advantage in the price charged by a producer may not be sufficient to offset the additional expense associated with restricted quota access.
European importers therefore need to assess more than the quoted price per tonne. Tariff treatment, product classification, origin documentation and CBAM exposure all contribute to the commercial calculation.
Proposed downstream CBAM coverage could extend exposure
A proposed extension of CBAM to selected downstream products would broaden the mechanism’s reach beyond basic steel and aluminium to manufactured goods containing these materials. The additional coverage would bring precursor emissions accounting into purchasing decisions involving machinery, hardware and fabricated products exported from China.
The wider product list remains under negotiation and is not yet binding legislation. Its eventual scope will determine which downstream goods face additional compliance requirements and how emissions associated with steel and aluminium inputs are accounted for.
For Chinese manufacturers supplying European markets, the proposal introduces another consideration alongside the costs of producing and exporting finished goods. The treatment of precursor materials could become relevant to the carbon calculations applied to covered manufactured products.
Verified emissions could differentiate Chinese suppliers
Producers seeking to strengthen their position in Europe may need more detailed production records, installation-level carbon calculations and longer-term supply agreements with European buyers. Accurate emissions documentation can help distinguish individual production facilities rather than treating all material from one country as having an identical carbon profile.
Exporters could also redirect shipments towards markets with less restrictive quota access or lower carbon-related costs. However, the extent of any trade diversion would need to be established through observed trade data rather than assumed from differences between regulatory regimes.
The competitive position of Chinese steel in Europe will consequently depend not only on national export volumes and production costs, but also on the emissions evidence available for individual products and facilities. Verified low-emission steel and material assessed using default emissions values may face different carbon-cost outcomes even when both originate in China.
