On 17 September, the European Commission published its revised target to reduce emissions by 55% by 2030, compared to 1990 levels. According to the European Steel Association (EUROFER) while steelmakers in Europe are already hard at work developing new ways to produce carbon-lean steels, the EU needs to implement a set of concrete measures, as soon as possible, to ensure that decarbonisation is achieved while actually ensuring growth and sustainability.
Axel Eggert, director-general of EUROFER, commented: “The success of EU climate leadership does not rely on its level of ambition – already unrivalled by any other major global partner, but mainly on its ability to demonstrate that it is possible to combine environmental sustainability with economic growth and social acceptance”.
EUROFER claims that the European steel has already highlighted its ambition to reduce CO2 emissions by 30% by 2030 from 2018 levels – or 55% compared to 1990 – and on to close to carbon neutrality by 2050”, Eggert said. “This will be achievable only under the right conditions and with the right framework in place”.
EUROFER believes that this framework consists of support for investment in innovation and roll-out, the creation of a market for green materials, the availability of the appropriate renewable energy sources, an international level playing field, and the application of the EU trade defence instruments without inhibition against third country trade distortions. This framework, says EUROFER, needs to be established as a matter of urgency.
“The Commission, in its Communication, recognises that reaching a 55% emissions reductions target will be a significant investment challenge for EU industry”, Eggert added. “The EU institutions must now provide concrete answers and solutions to address this challenge”.
The European steel industry, says EUROFER, is well advanced in terms of its low-carbon projects. However, success will be measured by the outcome: sustained existence of a thriving, innovative, decarbonised domestic steel industry in 2050.
“The EU needs a stable and predictable policy framework that delivers on the climate objectives and preserves the competitiveness of its industrial basis while providing security for planning and investment”, stressed Mr Eggert. “From this perspective, we are concerned by the proposals to increase the reduction factor of the EU ETS as well as a one-off cancellation of allowances, which would expose the sector to higher carbon costs at a time when low-carbon investments are desperately needed.
“In the absence of comparable efforts by trading partners, it is important to develop a strengthened framework of measures to address the risk of carbon leakage, with benchmark-based free allocation and indirect costs compensation, as well as an effective carbon border adjustment mechanism”.
According to Eggert, “EUROFER has, precisely to guide this process, been proposing a Green Deal on Steel, to act as a flagship for the implementation of the wider decarbonisation agenda”.
A Green Deal on Steel, EUROFER claims, would set out explicitly the wider policy adjustments that need to be made across climate, energy, environmental, trade and social policies, as well as the allocation of investment needed to transform aspiration into achievement. EUROFER has already established the parameters of this potential framework.
“The European steel industry looks forward to working with the Commission to make a success of this enhanced climate ambition”, Eggert concluded.