EU energy reform positive but ‘cosmetic’, says Unesid

The Spanish steel sector considers the provisional agreement to reform the EU’s electricity market, reached by the European Council and Parliament on 14 December, to be positive in the short term. However, although it provides all operators with a legal framework that avoids uncertainty, Spanish steel association Unesid deems it to be “unambitious”.

Unesid points out that, despite the government’s and other countries’ attempts, the domestic steel industry would have preferred more forceful measures. “The EU has chosen an almost cosmetic reform that we are not sure will guarantee, beyond good wishes, that our industry has electricity on the competitive terms it needs, and that will allow it to continue with the investments so relevant to those it has to face to complete decarbonisation,” comments Unesid general director Andrés Barceló.

The executive believes the current regulatory agreement may be valid in the short term, but does not guarantee a stable framework for a solid industrial base in the EU beyond 2030, Kallanish notes.

“If the solution to decarbonisation is the electrification of industry, there must be an energy supply at competitive prices because, otherwise, neither society nor companies will be able to address this electrification,” Barceló observes.

Unesid is concerned that the Iberian electricity market is still at a disadvantage compared to other European countries and this represents a great risk to the competitiveness of local steel producers.

The reform is the EU’s long-term response to the energy crisis experienced in 2022 as a result of the Russia-Ukraine war.

The provisional agreement provides the criteria for declaring a crisis, related to a sharp increase of the average wholesale electricity price. It also gives member states the possibility to exclusively support the purchase of new renewable generation, where conditions allow and in line with member states’ decarbonisation plans.

Among other measures, the legislators agreed to introduce an exemption from the application of the CO2 emission limit for already authorised capacity mechanisms, where duly justified.

Todor Kirkov Bulgaria