Brussels, 17 May 2022 – The European steel industry calls upon the plenary of European Parliament to fix the disruptive vote on the Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM) cast by its Environment Committee. Today’s outcome endangers €31 billion investments needed for deploying the 60 low carbon projects the European steel industry has in the pipeline, as well as €45 billion in exports value and 30,000 jobs.

“The Environment Committee missed the opportunity to develop an ambitious framework that would both allow deep cuts in CO2 emissions and secure manufacturing and jobs in Europe. In their current form, these extreme proposals approved by a tight majority risk disrupting all this without any additional gains for the climate if emissions are just leaked abroad”, said Axel Eggert, Director General of the European Steel Association (EUROFER).

Today’s decision to reduce free allocation by 40% for transitioning plants would be impossible to implement in just three years. In addition, an abrupt ETS free allocation phase out of CBAM-affected sectors deliberately risks endangering the viability of these industries, because there is no solution offered for exports competing with production from third countries that do not have the same stringent climate legislation as in the EU. The steel industry alone risks losing up to 20 million tonnes of exports worth €45 billion euros and at least 30,000 jobs, not even considering the damage caused to the internal steel market. Other proposals on ‘rebasing’ and on the Market Stability Reserve will also contribute towards fuelling carbon and electricity price increases, inflation and financial speculation by withdrawing millions of allowances from the system without any benefit for the achievement of the EU’s 2030 climate objective.

“Our industry has very ambitious plans to reduce emissions by more than one third by 2030. This would be a truly new industrial revolution requiring massive capital investment of over €30 billion and decarbonised energy and hydrogen in unprecedented quantity. Climate legislation needs to accompany this transition with balanced measures and realistic timelines rather than impose disproportionate costs that overburden companies before they can even implement their decarbonisation plans”, stressed Mr. Eggert.

“We call on the Members of the European Parliament to seize the opportunity to shape a regulatory framework that helps industry translate these ambitious plans into reality and make the EU the world leader of green steel”, he concluded.

Notes for editors

Contact
Lucia Sali, Spokesperson and Head of Communications, +32 2 738 79 35, (l.sali@eurofer.eu)

About the European Steel Association (EUROFER)
EUROFER AISBL is located in Brussels and was founded in 1976. It represents the entirety of steel production in the European Union. EUROFER members are steel companies and national steel federations throughout the EU. The major steel companies and national steel federation of Turkey and the United Kingdom are associate members.

The European Steel Association is recorded in the EU transparency register: 93038071152-83.

About the European steel industry
The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €125 billion and directly employs around 310,000 highly-skilled people, producing on average 153 million tonnes of steel per year. More than 500 steel production sites across 22 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.

Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.