On the occasion of the 2nd European Steel Day, the European steel industry appeals to European policy-makers to embrace a policy framework that puts the competitiveness of industrial value chains at the heart of decision making.

President of the European Steel Association (Eurofer) Wolfgang Eder said: “The European steel industry, together with other manufacturing industries, was, is and will always be the basis of Europe’s economy and the prosperity of its people. Breaking even one link in these value chains endangers the chain as a whole. We need policy which will secure the conditions so that manufacturing chains with their thousands of highly innovative, large, medium and small enterprises can further prosper in Europe.”

European countries with a strong industrial base and manufacturing value chains are much less affected by overall economic troubles than others, he said.

The current EU climate change policy clearly disadvantages the industry against competitors outside EU.

Eurofer is currently working on a ‘Steel roadmap for a low carbon Europe by 2050’, which is looking at a more comprehensive approach including the whole life cycle of steel.

“Climate change targets for our industry cannot be built just on visions. As long as breakthrough technologies are not available – and this has a long way to go – steel is not able to reduce further its direct emissions.” On the other hand, studies prove that innovative steel applications save more CO2 in the EU than the entire EU steel industry emits” said Mr Eder.

Eurofer is concerned about the continued discussions on new, more than ambitious unilateral climate targets for EU industries in 2030, ‘40 and ’50, and on the set-aside of allowances from the third period of the emissions trading system in order to artificially increase the carbon price.

“We strongly doubt that a set-aside is in line with EU legislation, or has a valid legal basis”.

Eurofer is against a set-aside because:

– The Emissions Trading Directive makes it clear that its 21% GHG reduction objective should be achieved in a cost-effective manner;

– It interferes in the market system and puts the credibility of the system at stake;

– A set-aside will lead to a further distortion by the ETS within sectors. Some steelmakers will have no unused allowances from the 2nd trading period when the 3rd period starts in 2013. These – having had a high degree of capacity utilisation during the crisis – would be punished by an artificial increase of the carbon price, and;

– A set-aside will lead to an increase in power prices and by this further jeopardizes the competitiveness of electricity intensive sectors such as electric arc furnaces.

With regard to the economic outlook, Eurofer does not expect steel market conditions to improve before 2013. Moderate recovery in real and apparent steel consumption probably results in some stock replenishment.

Eder concluded: “But overall, industry requires a stable, supportive political and economic framework if it is to flourish. We need answers to the challenges facing the Eurozone if we are to see confidence return to the markets and Europe’s economy brought back on track.”