Eurofer welcomes European Parliament’s vote for ‘carbon leakage’ measures

Steel producers association Eurofer has welcomed the European Parliament’s vote backing the principle that the EU should place a carbon price on certain imports from less climate-ambitious countries to raise global climate ambition and prevent “carbon leakage.”

Parliament on March 10 adopted a resolution on an EU carbon border adjustment mechanism (CBAM) with 444 MEPs voting for, 70 against and 181 abstentions.

The resolution underlines that the EU’s increased ambition on climate change must not lead to “carbon leakage” as global climate efforts will not benefit if EU production is just moved to non-EU countries that have less ambitious emissions rules.

The European Commission is expected to present a legislative proposal on a CBAM in the second quarter of 2021 as part of the European Green Deal.

According to an EC statement, “MEPs therefore support to put a carbon price on certain goods imported from outside the EU, if these countries are not ambitious enough about climate change.”

MEPs stressed that the CBAM would create a global level playing field and be compatible with World Trade Organization rules, and therefore would be not a form of protectionism. Revenues generated should be used to help meet targets under the EU’s Green Deal.

“The new mechanism should be part of a broader EU industrial strategy and cover all imports of products and commodities covered by the EU ETS and it should cover the power sector and energy-intensive industrial sectors like steel, aluminum, oil refinery, cement, paper, glass, chemicals and fertilizers, which continue to receive substantial free allocations, and still represent 94 % of EU industrial emissions,” the EC said.

Eurofer’s director general Axel Eggert said in a statement: “Higher climate ambition for 2030 and 2050 requires strengthened, not weakened, carbon leakage protection. This can only be achieved if the carbon border measure is implemented as a complementary tool to buttress existing carbon leakage measures. We welcome that elected MEPs recognized this.”

“The straight replacement of free CO2 certificates with a border measure and full exposure to the costs of the EU Emissions Trading Scheme would be bad policy. Primary steelmaking makes up three-fifths of European production, and such producers would face carbon costs at least 20 times higher than global competitors exporting to the EU,” he added.

“This vote shows that the Parliament intends to defend manufacturing and jobs in Europe.”

— Annalisa Villa