Turkish steel exports to the European Union declined sharply in the first seven months of 2026, while shipments to the United Kingdom, United States and Egypt increased as producers sought alternative markets amid tighter European import restrictions and carbon verification requirements.
Turkey’s deliveries to the EU fell 22% year on year to 2.8 million tonnes between January and July 2026, according to industry figures reported by S&P Global. The decline comes as changes to EU steel import safeguards reduce duty-free access and CBAM compliance places greater emphasis on verified emissions data.
The combination of trade restrictions, carbon-related compliance obligations and uncertainty over future access to European customers is putting pressure on Turkish steelmakers selling into the bloc.
EU safeguard measures cut Turkish steel quota access
New EU steel safeguard arrangements introduced in July 2026 reduced total duty-free import quotas by approximately 47% to 18.3 million tonnes annually. Imports exceeding the applicable quotas face tariffs of 50%.
Turkey’s country-specific allocation for hot-rolled coil (HRC) was reduced by approximately 59%, limiting the volume Turkish mills can supply under preferential import conditions.
These restrictions add to the commercial challenges facing Turkish producers, whose competitiveness in the European market now depends on both quota availability and their ability to meet carbon-related compliance requirements.
Verified emissions data determine CBAM cost exposure
Under CBAM, EU importers seeking to use actual embedded-emissions figures must obtain independently verified production data from overseas suppliers. Where acceptable verification is unavailable, importers may have to rely on default emissions values, which can be less favourable than the emissions performance achieved by the producer.
The distinction is particularly relevant to Turkey’s steel industry, where electric arc furnaces (EAFs) account for approximately 70% of production. EAF steelmaking can produce considerably lower direct process emissions than conventional blast-furnace production, particularly when recycled scrap is used.
However, this potential emissions advantage cannot necessarily be reflected in CBAM calculations without suitable installation-level information and an accredited verification conclusion.
Industry estimates reported by S&P Global indicate that verified actual emissions data could enable some Turkish producers to keep CBAM costs at approximately €10–€50 per tonne of steel, depending on the production route, emissions profile and applicable calculation rules.
Delays in completing verification could limit the ability of exporters to benefit from their actual emissions performance, reducing a potential source of competitive advantage in the EU market.
Processed steel exporters face additional data challenges
Producers of rerolled and processed steel products face further requirements because their emissions calculations may depend on information from upstream suppliers of billets, slabs and other precursor materials.
If reliable emissions data cannot be obtained for these inputs, the accuracy of the final product’s embedded-emissions calculation may be compromised.
The need to coordinate information across multiple production stages adds another compliance challenge for Turkish manufacturers supplying processed steel to European customers. Access to verified data from upstream producers is therefore relevant alongside installation-level emissions records.
Turkish mills redirect shipments to alternative markets
Higher shipments to destinations outside the EU have partly offset the decline in European sales. According to figures cited by S&P Global, Turkish steel exports to the United Kingdom rose 90% to 700,000 tonnes in January–July 2026.
Deliveries to the United States increased 17.2% to 340,000 tonnes, while exports to Egypt climbed 29.4% to 406,000 tonnes over the same period.
The shift reflects Turkish producers’ efforts to diversify their export destinations as access to the EU becomes more constrained by quota reductions and emissions verification requirements.
However, the UK market is also approaching a change in carbon regulation. Britain is scheduled to introduce its own Carbon Border Adjustment Mechanism in January 2027, potentially subjecting Turkish exporters serving that market to a separate carbon reporting and pricing regime.
Export pressures raise financing concerns for steelmakers
Reduced access to the EU market also creates financial challenges for Turkish steel producers and the banks financing their operations. Lower export sales raise questions over revenue generation, working capital availability and the capacity to fund decarbonisation investments.
Weaker cash flow could constrain investment in cleaner production equipment at a time when European buyers are placing greater emphasis on independently verified emissions performance.
Turkish mills with efficient electric arc furnaces, traceable scrap supplies and reliable emissions accounting may be better positioned to maintain their competitiveness. For producers with weaker financial or verification capabilities, however, tighter quotas could reduce sales before investments in emissions verification and lower-carbon production generate commercial returns.
