The European Commission published, on 21 September 2020, its revision of the EU ETS State Aid guidelines for the compensation of indirect carbon costs for the period 2021-2030. These revised guidelines are designed to support sectors that, like steel, are most at risk of carbon leakage.
The publication follows the recent Commission’s proposal on increasing the 2030 climate targets. In the absence of comparable efforts by trading partners, it is important to develop a strengthened framework of measures to address the risk of carbon leakage, with benchmark-based free allocation and indirect costs compensation, as well as an effective carbon border adjustment mechanism
Compensation for indirect costs incurred by the steel industry is an essential measure to mitigate the risk of carbon leakage due to the carbon costs passed on to the steel sector from the energy sector.
EUROFER has the following overall perspective on the revision:
The European steel sector is committed to emissions reduction, and compensation for indirect carbon costs forms an essential part of the policy framework necessary to ensure that the sector can continue to decarbonise whilst remaining globally competitive.
Brussels, 15 July 2021 – The Fit for 55 package, released yesterday by the European Commission, needs a more finely balanced approach to enable the decarbonisation of EU steel industry whilst avoiding the leakage of production and CO2 emissions outside the EU.
Brussels, 12 July 2021 – The European Commission is expected to put forward its Fit for 55 package of climate and energy policy measures on 14 July 2021. The Fit for 55 package is one of the most significant - and largest - groups of measures the EU has ever released in one go. It will completely revise the basis of EU climate and energy policy in attempt to bring it into line with the EU's political ambition.
The Fit for 55 package is one of the most significant - and largest - groups of measures the EU has ever released in one go.