IndustriAll Europe and The European Steel Association (EUROFER) welcome the decision to work on joint international efforts to address climate change and global sustainability objectives in the framework of the G7. The steel industry and its employees support a globally sustainable economy which reconciles environmental objectives with competitiveness and the creation of quality employment. A stable social dialogue, a more efficient use of energy, raw materials and resources, the reduction of greenhouse gas emissions as well as fair trade conditions are also central objectives of our industry. However this requires the establishment of the right policy framework.
Thus, with the view to global sustainability and effective climate protection the right conditions must be set, particularly in the following areas:
1. A robust and comprehensive international agreement on global climate protection must be achieved
The Climate Change Conference (COP21) in Paris in December 2015 will aim at adopting a new international climate change agreement post-2020. Concerted efforts at global level which translate into an international deal are the best way to address climate change. Global warming cannot effectively be combated at national or European level alone. It is crucial that other major steel-producing countries such as China or the USA commit to comparable ambitious targets such as those of the EU.
2. Emissions trading must be designed in such a way that in the long term a competitive steel production in Europe remains possible
Industry in all countries must be subject to comparable climate policy and costs in order to ensure a global level playing field. The Emissions Trading Scheme (ETS) is a key instrument of the European Union to implement climate targets in the industry. In order to remove competition distortion due to asymmetric carbon constraints, the ETS needs to be extended to the global level. However, particularly for emerging and developing countries, which need to catch up industrially, this will succeed only if it is compatible with industrial growth.
Currently, no comparable ambitious Emissions Trading Systems involving the steel industry exist in the other major economies outside Europe. So long as this remains the case, safeguard measures must be in place to protect EU industries which are exposed to international competition and therefore at risk of relocating production, jobs and emissions (production/investment, jobs and carbon leakage). This must also be a priority beyond 2020.
3. The energy transition must be affordable and must ensure industrial competitiveness
A radical transformation of the power sector aimed at achieving total decarbonisation of this sector through ambitious targets for renewable energy sources and energy efficiency constitutes a major challenge for the European energy-intensive industries, such as steel. In order to secure the sustainability of energy-intensive industries, it is essential to ensure that the transition to a low-carbon energy supply delivers stable, predictable and globally competitive energy prices.
A competitive steel industry is an essential prerequisite for the success of the energy transition in Europe. Advanced steel products are key to increasing energy efficiency in other sectors (e.g. renewables energy production and light-weight steels). R&D&I are therefore of crucial importance for the sustainability of the steel industry, as well as for the manufacturing industry in general and for meeting societal objectives.
In order to preserve the competitiveness of the steel industry, a special compensation scheme must be provided for the costs incurred by the development of renewable energy production.
4. Sustainable permanent materials such as steel must be considered in the post-2015 development agenda
Resource efficiency is also a pillar of the G7 presidency. This year at the UN level, the so-called post-2015 development agenda should be negotiated, in which the sustainability targets alike for developing, emerging and industrialised countries should be formulated. The protection and sustainable use of natural resources will also play an important role. The European steel industry makes a significant contribution in this area and occupies a leading position worldwide.
With new and innovative steel materials, such as in the field of high-strength steels, the steel industry contributes through the use of steel products to the increase of material and energy efficiency, as well as to the reduction of CO2 emissions. It should be noted that high-tech steels require more production steps and therefore higher resource utilisation at production level, but allow more efficient use of resources and energy in the utilisation phase. The steel industry is also continuously working at the closing of material cycles (circular economy), thereby saving a significant amount of natural resources and CO2 emissions.
Steel is a material which is endlessly recyclable – a permanent material. This quality in sustainability material preservation should be explicitly taken into account in the negotiations on sustainable development goals and their implementation in the field of resource efficiency. In addition, an environmental legal framework needs to be established, in which the use of by-products will be promoted rather than hindered.
5. Securing an international level playing field for steel by establishing fair trade conditions
In the context of high global excess steel capacity driven by China, worsened by weak steel demand growth in many countries, excess steel production is being exported to the international markets distorting traditional steel trade flows and depressing prices and profit margins. Steel industries in many countries are relying on active and supportive domestic trade policies often driven by industrial development and protection objectives such as import tariff increases, mandatory national product certification, raw material export restrictions, subsidising, local content, etc.
EUROFER and industriAll Europe call for a trade policy effectively establishing fair trade conditions for the EU steel industry by creating improved disciplines and strong enforcement to level the international playing field through:
- Unhampered and non-discriminatory access to third country markets
- Free and undistorted access to raw materials
- Effective trade defence instruments timely tackling unfair trade
China should not be granted Market Economy Status as long as the country does not meet the criteria, otherwise anti-dumping measures will become meaningless. The EU together with its major steel trade partners should closely align their regional assessments of the question of China's Market Economy Status. Acting unilaterally would result in massive deflection of trade without any possibility of redress.
6. Social dimension and just transition
A highly qualified workforce is a prerequisite for a competitive and sustainable steel industry. Economic and employment policies must be oriented to the creation and maintenance of high-quality, sustainable jobs.
The transition to a low-carbon economy must bring about a just transition which ensures that workers affected are re-skilled and trained to re-enter the labour market and that effective social dialogue is promoted so as to guarantee that change is handled in a socially responsible manner.
This joint document is an initiative of the social partners EUROFER and industriAll Europe within the Sectoral Social Dialogue Committee on Steel.
EUROFER – the European Steel Association – represents the European steel industry with direct employment of 328 000 people and the production of 170 million tons of steel per year.
IndustriAll – the European Trade Union – represents the interests of 7 million workers in Europe from the manufacturing sectors of metal, chemical, energy, paper, mining and textiles.