Antonio Gozzi, president of Federacciai, is calling for a temporary suspension of the Emissions Trading System (ETS) in Italy where electricity prices are strongly linked to gas costs. This could reduce power prices by around €25/MWh ($29.10/t) while awaiting a broader revision of the mechanism at EU level.
Speaking at a recent energy transition event in Rimini, Gozzi said the EU ETS has gradually evolved beyond a decarbonisation instrument into what he describes as a carbon tax exposed to financial markets.
Amid global uncertainty and rising energy prices for European companies, the impact of the system should be considered carefully.
“No one can accuse the Italian steel industry of being opposed to the energy transition: already today we are among the most decarbonised production systems in the world, with around 85% of steel produced through electric arc furnaces. But decarbonisation must not turn into industrial desertification,” Gozzi warned.
Meanwhile, the proposal for the Industrial Accelerator Act presented by the European Commission represents another missed opportunity to boost the competitiveness of the European steel industry, he added.
The absence of “Made in Europe” criteria for steel is concerning. The Commission believes the steel sector will benefit sufficiently from the new trade regime to be implemented from July. However, this is made to address global overcapacity and cannot replace specific measures to support European production.
“On the issue of ferrous scrap, a strategic resource for circularity and the green transition, the final text has also been weakened. Measures included in earlier drafts aimed at promoting the use of secondary raw materials in Europe and strengthening the monitoring of scrap exports have been removed,” Gozzi states in a note obtained by Kallanish.
Uncertainty also remains regarding the classification of low-emission steel. The Commission has decided not to regulate the voluntary “green” steel label directly and it does not clearly define the methodology to be adopted.
“We reiterate that any criteria must be based exclusively on the actual product carbon footprint, avoiding mechanisms such as the scrap sliding scale, which would unfairly penalise electric arc furnace production, among the greenest and most circular steelmaking routes,” he concludes.
