Right framework needed to deliver EU emissions reduction targets

"The steel sector has made great strides in its efforts to reduce emissions, but needs the right framework to deliver upon the ambition set out in the EU’s plans," says the European Steel Association (EUROFER).

"The steel sector has made great strides in its efforts to reduce emissions, but needs the right framework to deliver upon the ambition set out in the EU’s plans," says the European Steel Association (EUROFER).

According to EUROFER, the EU has published its draft climate law implementing the principles of the Green Deal presented at the end of 2019.

“The European steel industry has the ambition to reduce emissions by 30% by 2030 compared to today’s levels – in addition to the reductions achieved since 1990 – and by 80-95% by 2050. To achieve these reductions we need all the pieces of the puzzle to be in place”, said Axel Eggert, director-general of EUROFER. “This means support for R&D, access to finance, sufficient and competitive supply of affordable CO2-neutral energy, the creation of markets for green steel, and a level playing field with less climate-ambitious global competitors”.

According to EUROFER, the EU is responsible for 10% of global greenhouse gas emissions. This means that the EU can only lead the charge towards emissions reduction – it cannot stop climate change it on its own – and the EU must show that its policies work if other regions of the world are to follow. EUROFER believes that the Commission’s current proposal needs a deeper assessment of the impact of the policy for the EU in the global context.

“The EU must take a deeper look, not just at EU emissions per se, but at the CO2 embedded in the products and services placed on the EU market”, suggested Mr Eggert. “Take steel as an example: the EU steel industry has reduced metal production by 14% since 2005. However, the market share of imports has increased by 80% since then. These imports have, on average, a much higher CO2 footprint than steel made in the EU. The net effect of climate policies that only look at CO2 emitted in the EU and not at the embedded CO2 in products themselves risks being green in name only”.

The European steel industry directly employs 330,000 people, with a further 2.4 million indirectly relying on the sector. This workforce is down by 25% since 2008. Studies show that the ‘green’, carbon-lean steels that European producers could create could cost 35-100% more to make compared to imported products made using current technologies.

“This means there needs to be a market for green steel – and a means to ensure that these products are competitive with carbon-intensive imports as well as on global markets”, specified Mr Eggert. “The EU steel industry is constantly developing new types of steel that lead to huge efficiency gains in steel-intensive applications, such as for wind mills, power turbines, or road vehicles. It is supporting these advanced steels and cleaner ways of producing them that shows Europe is serious about climate change. Importing what we need and exporting jobs and CO2 does not”.

Mr Eggert concluded, “Implementing practical measures to actually lead the reduction of global emissions in the coming decades will define the success of the EU’s commitment to reducing emissions whilst preserving its jobs, prosperity and industrial base”.