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“The road to de-industrialisation” – Eurofer slams EU Commission energy and climate plans

"The Commission proposals on energy and climate up to 2030 will do nothing to promote an industrial rennaissance, rather they will accelerate the de-industrialisation which is already underway," says Gordon Moffat, director-general of EUROFER.

According to Eurofer, while there is a recognition of a widening gap in energy prices and costs between the EU industry and its competitors, no real measures are being taken to reduce it.

Furthermore, no account has been taken of the situation of individual industries regarding the availability of technologies that enable them to reduce emissions further.

Where the steel industry is concerned, EUROFER believes that there are no technologies which can be economically applied and that post 2020 targets are 'simply impossible' for the steel industry to achieve.

EUROFER says that an EU ETS target of 43% CO2 emission reduction by 2020 compared to 2005 means a 60% reduction for the EU steel industry compared to 1990.

"With these proposals even the most efficient steelmaker in Europe will have a cost disadvantage vis-a-vis its non-European competitors," said Moffat, adding that even the most efficient of steelmakers will have to buy up to 30% of their need in emission permits 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," he said, appealing to EU member states and the European Parliament to adopt some principles which would make EU energy and climate policy workable for energy-intensive industry and sustainable for the EU economy.

The policy was originally devised in 2007, argues EUROFER, and needs to be re-appraised in the absence of a level playing field with the rest of the world. To safeguard European industry, 100% free allowances are needed 'up to and beyond 2020' and 'real measures to tackle energy prices are required.

Eurofer argues that there are three measures that need to be taken, all of which have been disregarded by the EU. According to EUROFER, hose measures are:-

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," argued EUROFER.

2. There must also 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. Finally, 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.