EU to prolong free CO2 allowances beyond 2030

European steelmakers are on track to receive free CO2 allowances as part of the Emissions Trading System (ETS) beyond 2030, Kallanish learns from sources.

In May, the European Parliament’s committee voted in favour of accelerating the phasing out of ETS free allocations, cutting them for European steelmakers from 2030. In a recent meeting, though, the parties reached an understanding to continue them until at least 2032.

Peter Liese, lawyer and negotiator involved in reforming the ETS system, confirms in a statement that a first agreement was reached.

“The Commission proposal wanted to get rid of the respective calculation methodology which would have created an enormous challenge for the steel industries, much bigger than for other industries, after the implementation of the amended ETS,” Liese says. “We now concluded that the rules for the steel industry will remain the same. Of course, the steel industry will be challenged by the higher target and the respective changes in the linear reduction factor like all other industries.”

Eurofer has welcomed this development, but notes that free allocations will nevertheless be reduced as part of the plan to phase out allowances, and that costs are yet to be calculated for the sector.

Emanuele Norsa Italy