Green Steel, Shared Rules? A Closer Look at Low-Carbon Steel Labels in China and Europe

China and Germany have developed voluntary low-carbon steel labels that are already operational and used for certification in China and across Europe. The two label systems are broadly comparable in technical terms. Both support a transition towards deeply decarbonised primary steel and renewable-powered scrap-based production, though important differences remain in system boundaries and emissions-accounting methodologies. This technical comparability reflects the fact that steel decarbonisation is advancing in both China and Europe, with broadly similar technological pathways emerging. Greater alignment between the standards could facilitate trade, improve communication between market actors and give investors clearer signals about which decarbonisation routes are likely to remain credible and commercially viable across markets. International efforts to improve transparency and interoperability should therefore be supported. However, whether low-carbon steel labels can support international trade and cooperation will depend on wider geoeconomic and political conditions. Rising trade tensions, persistent EU concerns about Chinese overcapacity, and the prospect of faster low-carbon capacity expansion in China all pose challenges for European producers. Efforts to improve standards interoperability can help build common ground, but they must be accompanied by broader European policy measures to strengthen the competitiveness of domestic green steel production. Definitions of low-emission steel, including the new EU-level definition currently being developed, need to be ambitious and consistent in order to enable the emergence of lead markets. Currently, a new definition is being developed under the EU Ecodesign Regulation for application in public procurement and funding programmes across Europe in the context of the proposed Industrial Accelerator Act. Given the historic approach of Ecodesign regulation, it remains unclear how EU-level standards will relate to the existing voluntary labels in terms of methodology and ambition.