GravitHy, Outokumpu, SSAB, Stegra and Hydnum Steel are urging the EU to maintain the current level of ambition of its Emissions Trading System (ETS), Kallanish notes.
The group of green steel producers is reacting to calls by other European steelmakers to pause the system, arguing that a strong and predictable carbon price signal is essential to unlocking investment in low-carbon technologies.
Their joint statement, seen by Kallanish, says that foundations for decarbonisation investment are already in place, including the Carbon Border Adjustment Mechanism (CBAM) and steel safeguard measures, with further tools in development.
However, the signatories warn that decarbonised products must be able to compete with fossil-based alternatives for investment to materialise.
The EU ETS, they argue, is a key instrument to achieve this. “Maintaining an upward trajectory of CO2 prices is essential to achieving both the European Union’s climate goals and its industrial ambitions,” the statement says.
It sets out three priorities, including ensuring long-term regulatory stability, preserving the integrity of the ETS, and directing revenues toward industrial transformation.
According to the Climate Leadership Coalition (CLC), the European steel sector is entering a new and key investment cycle as blast furnaces are gradually being phased out.
The near-zero emission production routes, including hydrogen-based direct reduction and EAF steelmaking, are advancing.
Carbon pricing is a crucial condition to make clean steel competitive. “The ETS has begun to deliver what industrial investments need most: a credible long-term, technology-neutral price signal…Without that price signal, the business case for transformation weakens and, in the worst case, investments
“The EU ETS is delivering emissions reductions while providing the foundation for Europe’s industrial transformation. The task now is not to redesign the system, but to preserve and strengthen what works, and to ensure that the system’s design continues to reward investment in the clean transition,” the note continues.
The coalition calls for a strong and predictable ETS trajectory beyond 2030, with carbon prices high enough to drive investment in clean technology. It urges the preservation of the ETS market architecture and the Market Stability Reserve, and supports the phasing out of free allowances to strengthen the case for near-zero emission production.
Finally, it calls for ETS auction revenues to be directed toward industrial decarbonisation rather than absorbed into national budgets.
Author: Natalia Capra
