The official publication of the European Commission’s proposed revisions of the European Union’s Emissions Trading Scheme (EU ETS) has been severely criticised by EUROFER (the European Steel Association).
Axel Eggert, EUROFER’s director-general, has stated that the revisions ‘fail to take into account the European Council guidelines on the importance of preventing carbon and investment leakage’ and represent a ‘missed opportunity to fix the fundamental flaws of the EU ETS’.
He said that the proposal was at odds with the goals of the European Commission’s Agenda on Jobs, Growth and Investment as it failed to secure a global level playing field.
According to EUROFER, even the most efficient European steel plants will experience excessive additional costs not borne by their global competitors.
“This uneven distribution of costs is due to the continuation of the cross sectoral correction factor, as well as the artificial reduction of the performance benchmarks,” said EUROFER, adding that it doesn’t provide the necessary legal certainty that indirect carbon costs passed through in electricity prices will be offset in all member states. Currently there are 22 member states that do not offset any of these unilateral EU costs.
EUROFER wants the proposed revisions to be adjusted in order to fully offset direct and indirect carbon costs at the level of the most efficient steel plants in Europe, which are exposed to fierce global competition and at high risk of carbon leakage.
With European steel industry employment down 20% and steel demand down 25% compared to pre-crisis levels, failure to make the necessary adjustments will ‘deliver another major blow to our sector,” Eggert said, appealing to policymakers to take the threat seriously and not ignore the ‘clear results of the impact assessments or the anticipated effects on the EU steel industry’.
“The goal of the EU ETS is to reduce the impact of Europe’s economic activity on the climate,” Eggert said, adding that EUROFER was concerned that several elements of the revision risked the continued competitiveness of the European steel industry.
“We believe that a tool to strengthen environmental performance should not risk European jobs and prosperity,” Eggert concluded.
Other industries showed equal concern. Gerd Götz, director-general of European Aluminium, said that the proposals fell short in terms of restoring global competitiveness and ignored unanimous calls from all 28 member states and the European Parliament for harmonised EU compensation for indirect ETS costs.
Utz Tillmann, director-general of VCI, the German chemical industry association, said: “In 2014 the European Council decided that the most efficient industrial installations should not be burdened any heavier by ETS in the future. With its draft the Commission entirely loses sight of that position.”