BRUSSELS – The European steel industry asked the European Union on Monday not over-burden its sector with regulations when it begins to reform its laws on the production of greenhouse emissions.
The EU is set to amend its Emissions Trading System (EU ETS) for the period 2021-2030 and Eurofer, representing the steel industry, addressed it in an open letter.
“You can avoid burdening the sector with high costs that will constrict investment, or that will increase the risk of job losses and plant closures in the EU,” Eurofer’s letter said.
Eurofer’s Director General, Axel Eggert, presented the European Council (representing EU member countries,) the European Parliament and the European Commission with the document signed by the presidents and CEO’s of all 76 European steel industries, including Spain’s Acerinox, Celsa, Aceros Inoxidables Olarra and AG Siderúrgica Balbo.
The EU is set to begin the last negotiation round to reform the EU ETS that represent 40 percent of the EU’s greenhouse emissions and which is now applied to 11,000 high-energy-consuming industrial plants.
The EU ETS was rolled out in 2005 and was the world’s first greenhouse emissions control system, remaining still as the most widespread.
The challenge awaiting the reform is to strike a balance between global warming targets without forcing steel companies to abandon their EU-based manufacturing facilities.
To stay within the parameters, companies have the option of acquiring cleaner technologies or purchasing carbon credits.
Carbon allowance rights should be traded at around 25 euro ($28) per metric ton of carbon dioxide.
The fall in demand due to the financial crisis has meant that, from 2008, carbon shares were down to four euros per ton, a price that leaves no incentive to upgrade technology.
Europe’s manufacturers point out the EU-ETS creates “high carbon costs for even the best performing steel plants.”
Eurofer said it feared the reform under discussion will “favor steel imports from third country competitors that do not have such costs and a far higher carbon footprint than steel made in the EU.”
On the other hand, the World Wildlife Fund said in a statement that the future depended on “more and faster” drops in emissions and by eliminating allowances.