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European steel industry CEOs raise alarm about Emissions Trading System reform

European steel industry CEOs raise alarm about Emissions Trading System reform

May 31,2017

CEOs representing the European steel industry have co-signed a letter addressed to the governments of all EU member states calling on political leaders to 'help preserve a sustainable and globally competitive European steel industry'.

'In Europe we must be able to produce the innovative steels that underpin modern society – and that help reduce CO2 emissions,' the CEOs stated in the letter.

Speaking after the signing of the joint letter Axel Eggert, director general of the European Steel Association (EUROFER) – which represents 100% of steel production in the EU – commented that the European steel industry is one of the most innovative in the world. "Our CO2 mitigation technologies are world beating," he said, explaining how the EU has a large and open economy and that if the post-2020 reform of the EU’s Emissions Trading System (EU ETS) creates costs for even Europe’s best performing steel plants, the industry will find itself 'uncompetitive in the fierce global marketplace for steel.'

The letter highlighted the specific costs of EU ETS reform as it exists today. According to EUROFER, while the European Parliament produced a version that would go some way to limiting the impact of the EU ETS on European steel’s competitiveness, the European Council text provided no such protections.

Quoting the letter, Mr Eggert said, “Were the EU ETS directive to be adopted without some of the improvements requested by the European Parliament there would be a shortage of emissions allowances for our industry of around 35% by 2030. In addition, the sector will be even more exposed to the carbon cost pass-through in electricity prices. Other industry sectors under the EU ETS do not face these constraints to the same degree.”

EUROFER says it appreciates that climate protection is a critical issue and supports the necessary measures to bring greenhouse gas emissions under control. However, the industry – as evidenced by wide support from the sector’s leadership – feels obliged to highlight that these CO2 emissions reduction efforts must be conducted cost-effectively and with a mature regard to EU steel’s global competitiveness.

“Steel produced abroad can be up to 50% more CO2-intensive than the same product produced in Europe. Getting the EU ETS post-2020 reform right is, therefore, both a matter of jobs, growth and competitiveness, but also of making sure we do not simply export our CO2 outside the EU”, Mr Eggert concluded.

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