Eurofer has asked the European Commission to reconsider the phasing out of free allocations of Emissions Trading System (ETS) certificates, as increasing costs are hitting the entire European steelmaking industry.
The association warned this week of the negative impact of increasing ETS costs and energy prices on the industry.
“We ask both the Member States and the European Parliament to reconsider the currently proposed ETS free allocation phasing out in close conjunction with the CBAM on the basis of a more realistic impact assessment, or it will become a Trojan horse for the EU’s very own ambitious decarbonisation objectives,” Eurofer director general Axel Eggert says in a statement sent to Kallanish.
Eurofer calculates that the current timeframe set by the EU could mean a single European steelmaker faces in 2030 a €400 million ($452m) carbon cost, even if investments into cleaner technologies are completed by then. At the same time, a non-EU company would bear a cost of “only” €30m, despite the introduction of the CBAM levy at the EU border.
Eurofer explains that the phasing out of ETS free allocations is set at a much quicker pace than the possibility to cut CO2 emissions by steelmakers, creating a threat to future investments for decarbonisation in the sector.
“In the last months, energy-intensive companies that are most exposed to price spikes have already been forced to react by curtailing and/or temporarily closing plants. Gas and electricity prices have been rising exponentially, registering 4-to-5-time increases in comparison with last year. In parallel, carbon price spikes of up to €80-90 have an increasing impact on electricity prices,” Eurofer observes.
Emanuele Norsa Italy