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Commission proposals on energy and climate are the road to de-industrialisation

EU Commission adopts package on energy and climate framework up to 2030 and on an industrial renaissance

“The Commission proposals on energy and climate up to 2030 will do nothing to promote an industrial renaissance, rather they will accelerate the deindustrialization which is already underway” says Gordon Moffat, Director General of EUROFER.

  • there is a recognition of a widening gap in energy prices and costs between the EU industry and its competitors but no real measure to reduce it.
  • no account has been taken of the situation of individual industries as regards availability of technologies to allow them to reduce emissions further. In the case of steel there are no technologies which can be economically applied. The post-2020 targets are simply impossible for the steel industry to achieve. There should be no targets without technologies.

An EU ETS target of 43% CO2 emission reduction by 2030 compared to 2005 means a 60% reduction for the EU steel industry compared to 1990, which is technically and economically impossible to achieve with current technologies as the Commission services admitted in a study published in 2012 and 2013. “With these proposals even the most efficient steelmaker in Europe will have a cost disadvantage vis-à-vis its non-European competitors. Our most efficient plants will have to buy up to 30% of their need in emission permits already by 2020. There are no proposals made to safeguard sectors exposed to global competition in the mid-term and long-term, which is crucial for investment decisions. For post-2020 the current system even foresees phasing out of any free allocation to these sectors. Moffat: “We appeal urgently to the EU member states and the European Parliament to adopt some principles which would make the EU energy and climate policy workable for energy intensive industry and sustainable for the EU’s economy.” We are no longer in 2007, when this policy was devised, we need a climate policy which, in the absence of a global level playing field, will continue to safeguard Europe’s industry – we need 100% free allowances up to and beyond 2020 and real measures to tackle energy prices.

EUROFER reiterates that there are just three measures needed, which have however been disregarded in the proposals put on the table today:

  1. The package must not result in direct or indirect costs for at least the most efficient industrial installations (best performers) in sectors exposed to global competition, as long as there is no international agreement on climate change which provides for similar constraints for our competitors. Until that time, steel needs 100% free emission permits for at least its best performers with no reduction and with full compensation (with free permits) of the CO2 costs passed through in electricity prices by the power sector.
  2. There must be a clear commitment and objective by the Commission to reduce the gap in industrial energy prices and costs between the EU and its main competitors, such as the US.
  3. The Commission must allow Member States to fully exempt energy intensive industries which are exposed to global competition, such as steel, from decarbonisation surcharges - such as taxes, levies, including grid levies, and other costs relating to the support and development of low carbon generation - as long as competitors do not have to bear such surcharges.

Represented by EUROFER, the European steel industry represents the world leader in its sector, producing on average 170 million tonnes of steel per year with direct employment of 350 thousand highly skilled people. More than 500 steel production and processing sites in 24 EU member states provide direct and indirect employment for millions of European citizens.

Contact:

Gordon Moffat, Director General, +32 2 738 79 26 (g.moffat@eurofer.be)

Axel Eggert, Director Public Affairs & Communication, +32 2 738 79 34 (a.eggert@eurofer.be)

EUROFER - The European Steel Association

Avenue de Cortenbergh, 172
B-1000 Brussels

Tel.: +32 2 738 79 20
Fax.: +32 2 738 79 55