European steel trade federation Eurofer has begun legal action against the European Commission’s proposal for steel benchmark allowances for the period starting 2013, as it considers the targets unachievable.

The commission’s decision is expected to come into force mid-April, and has been made through its climate department.

Eurofer said it believes the proposal infringes the European Emissions Trading System (ETS) directive and could cost the EU steel industry €5bn between 2013 and 2020.

The ETS necessitates the setting of benchmarks which decide the level of free allowances to cover industry emissions from 2013.

“The [ETS] directive requires that best performers in carbon leakage sectors receive for free all the allowances necessary to cover their emissions,” Eurofer’s director general Gordon Moffat said

While the ETS directive states the starting point for benchmarks for any industry ‘shall be the average performance of the 10% most efficient installations in the sector,’ the commission’s decision is not based on this rule, Eurofer said.

In spite of specific provisions in the ETS directive, the commission has not assigned the full carbon in unavoidable waste gases to the steel benchmarks and this is despite provisions in the directive for the use of recovered waste gases for electricity generation at mills which substitute power generated externally to save on CO2 emissions, it said.

The commission did not use data supplied by the industry – another ETS rule – but based its decision on other literature, Eurofer added.