Steel industry needs right framework to hit EU’s new emissions promise

This month, the European Commission agreed to speed up its plan to cut emissions, setting a 55% reduction target by 2030 (compared to 1990 levels). European Steel industry association EUROFER has called on the Commission to implement a set of concrete measures as soon as possible, to ensure decarbonisation is achieved while actually ensuring growth and sustainability.

Carbon-lean steels are being developed by the industry, which is aiming for carbon neutrality by 2050. European steel is targeting a 30% reduction of CO2 emissions by 2030 from 2018 levels – the equivalent of 55% compared to 1990, said EUROFER.

EUROFER Director General Axel Eggert said: “The success of EU climate leadership does not rely on its level of ambition – already unrivalled by any other major global partner, but mainly on its ability to demonstrate that it is possible to combine environmental sustainability with economic growth and social acceptance.”

Ambitious targets will be achievable, said Eggert, “only under the right conditions and with the right framework in place”.

EUROFER’s hit list of ideal framework measures include:

  • Support for investment in innovation and roll-out
  • The creation of a market for green materials
  • The availability of the appropriate renewable energy sources
  • An international level playing field
  • And “the application of the EU trade defence instruments without inhibition against third country trade distortions”.

“This framework needs to be established as a matter of urgency,” said EUROFER.

“The EU needs a stable and predictable policy framework that delivers on the climate objectives and preserves the competitiveness of its industrial basis while providing security for planning and investment”, stressed Mr Eggert. “From this perspective, we are concerned by the proposals to increase the reduction factor of the EU ETS as well as a one-off cancellation of allowances, which would expose the sector to higher carbon costs at a time when low-carbon investments are desperately needed”.

“In the absence of comparable efforts by trading partners, it is important to develop a strengthened framework of measures to address the risk of carbon leakage, with benchmark based free allocation and indirect costs compensation, as well as an effective carbon border adjustment mechanism.”

EUROFER has previously proposed a Green Deal on Steel to act as a flagship for the implementation of the wider decarbonisation agenda, explicitly setting out the wider policy adjustments that it believes are needed across climate, energy, environmental, trade and social policies, as well as the allocation of investment needed to transform aspiration into achievement.

“The European steel industry looks forward to working with the Commission to make a success of this enhanced climate ambition,” concluded Mr Eggert.