Policy shields often matter across the entire value chain. Many suppliers argued that CBAM and trade protection policies only work if they cover downstream goods, not just primary steel, so that European producers of green finished goods are not undermined by carbon-intensive imports. Steel suppliers interviewed for this report highlighted key systemic challenges, opportunities and recommendations in relation to decarbonizing steel production, summarized below. Systemic challenges Fragmented standards and accounting Suppliers see an urgent need for interoperable definitions and measurement rules that take into account complex supply chains. IEA calls for clarifying principles for near-zero definitions and harmonizing greenhouse gas accounting methodologies, to avoid market fragmentation and double counting.109 Policy gap between targets and bankability Europe’s CBAM and ETS reforms can raise the floor for high-emitting imports and domestic production, yet lead markets for green steel are still patchy. Germany’s Low Emission Steel Standard (LESS) and EU-level efforts to incorporate non-price criteria in procurement are promising templates, but they remain early-stage or non-binding in many jurisdictions.110 Energy-system dependencies The competitiveness of hydrogen-DRI is a function of power prices, electrolyser utilization and hydrogen logistics. Cost parity improves materially with low-cost renewables and hydrogen, but many regions are far from that equilibrium.111 Permitting and infrastructure sequencing Industrial siting, grid interconnects, water and CO2 transport (where CCUS is relevant) are bottlenecks that reset project-critical paths and delay financial close – an experience echoed across supplier experiences in multiple regions. Macroeconomic challenges and buyer caution Several suppliers observed a softening in multi-year offtake appetite amid macro uncertainty – even among historically forward-leaning buyers – complicating financing for first-of-a-kind assets. Trade and leakage exposure across finished goods Some trade policies do not sufficiently address the full steel value chain, which can unintentionally erode green producers’ market share via finished goods imports embedding high-emissions steel. Turning Challenge into Opportunity: Supplier Voices from Heavy-Emitting Sectors 36

Turning Challenge into Opportunity 2025