Deep emission reductions are technically achievable in the EU steel industry only with the right framework in place, including support for investment in innovation and roll-out, the
creation of markets for green materials, the availability of the competitive low carbon energy sources, an international level playing field, and the application of EU trade defence
instruments against trade distortions.
Higher climate ambition, which will translate into higher carbon costs and emission reduction efforts, requires strengthened carbon leakage measures, in particular for sectors at highest risk due to high trade exposure and energy intensity such as steel.
Steel products sold on the EU market, whether produced in the EU or imported from third countries, need to have similar CO2 cost constraints. EU steel exports need also to have CO2 cost level playing field on global steel markets.
A well designed and effective CBA ensures that all emissions come with a cost, regardless of their country of origin, and provides strengthened carbon leakage protection only if it
complements and addresses the shortcomings of the existing measures, which shall be based on 100% of the benchmarks, without any reduction.
A CBA with full auctioning would have a disruptive impact on the EU steel industry and the related value chains, as it would expose EU steel producers and downstream sectors to the full carbon costs, undermining the financial ability to invest in low carbon technologies and jeopardising the competitiveness of EU exports.
In order to prevent carbon leakage, the CBA should be introduced in a way that the importer has on one side a comparable carbon cost level to the EU industry and on the other side a sufficiently high incentive to decarbonise, while addressing the risks of cost absorption and source shifting. The design of the CBA should also take into account the fact that EU producers are subject to the carbon costs for their entire production, while importers would be subject only for the quantities exported to the EU. Due to that, a CBA set at a too low level would not provide the sufficient carbon cost constraint to avoid carbon leakage.
Brussels, 15 September 2021 – In her second State of the Union address, European Commission President Ursula von der Leyen set out the Green Deal as a major achievement and a cornerstone for the future of the EU. The steel industry is a world leader in decarbonisation and innovation, and has the ambition of reducing its emissions by 55% by 2030 compared to 1990. But it will be successful only if the Fit for 55 Package puts the right conditions and incentives in place.
Neutrality towards technology choices, acknowledgment of transition timing and framework conditions needed as well as consistency with EU climate legislation are key factors for success, EUROFER webinar points out
Brussels, 16 August 2021 – EU28 apparent steel consumption increased (+3.6%) year-on-year in the fourth quarter of 2020, that was the first quarterly growth since the fourth quarter of 2019, and so it did in the first quarter of 2021 (+0.9%). Apparent steel consumption in the first quarter amounted to 36.3 million tonnes. These are further signs of recovery from the depths of the economic shock caused by the COVID-19 pandemic.