Eurofer calls EU parliament to fix carbon market reforms vote

European steel association Eurofer on May 17 asked the European Parliament to “fix” what they are calling a “disruptive vote” on the European Commission’s proposed reforms to the Emissions Trading System, or ETS, and Carbon Border Adjustment Mechanism, or CBAM.

On May 17, the European Parliament’s environment committee backed the European Commission’s proposed reforms to the EU ETS and CBAM, ahead of a full parliament vote in June, which will be followed by negotiations with the EU member states later in the year.

According to Eurofer, the decision to reduce free allocation by 40% for transitioning plants would be impossible to implement in just three years.

Eurofer called “an abrupt ETS free allocation phase out of CBAM” affecting the sector and said that there is no solution for exports competing with production from countries that do not have the same strict climate legislation as the EU.

“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,” Eurofer’s Director General Axel Eggert said in a statement.

“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,” he added.

According to Eurofer, the steel industry will risk losing at least 20 million tons of exports worth Eur45 billion ($47 billion).

The parliament’s environment committee adopted five reports under the EU’s so-called Fit-for-55 package, which seeks to deliver on the bloc’s 2030 emissions goal.

The association stressed how cutting emissions by more than one-third by 2030 is a real “industry revolution” that required funds and legislation to sustain it.

“… 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 decarbonization plans,” said Eggert.

EU carbon allowance prices for December 2022 delivery rose as high as Eur92.75/mtCO2e ($97.71/mt) May 17, the highest since Feb. 24. That compared with Eur89.56/mtCO2e at the close May 16, according to S&P Global Commodity Insights data.

Platts HRC in Northern Europe was down Eur50 May 17 at Eur1,100/mt ($1,158.74/mt) ex-works Ruhr, according to data from S&P Global.

— Annalisa Villa