It operates on a ‘cap and trade’ system, where maximum emissions are set and allowances over the maximum are allocated and auctioned and can be traded with other companies. Emissions reductions of 61% from 2005 levels for businesses have been proposed in the Fit for 55 package. As of 25th February 2022, the EU price for carbon emissions was EUR88.14/t (US$103.7/t). The EU is also providing positive investment in carbon emissions reduction technologies through its EUR1.1bn (US$1.3bn) Innovation Fund, through which Swedish steelmaker SSAB has already received funding. European steel mills, therefore, have the greatest economic incentive for decarbonisation in the world. In addition to European regulations and funding, the US and the EU ended their steel trade dispute in October 2021. They have agreed to collaborate on green steel together and have set a date in two years’ time for negotiations on a trade agreement that will favour low-carbon, or green, steel. The EU and the US could agree on a scheme that resembles the EU’s carbon border adjustment scheme, which will penalise steel producers with larger carbon emissions and protect the expensive decarbonisation efforts of European steelmakers.