Promotion of market-based instruments should only be considered if it can be clearly demonstrated that they will deliver the environmental objectives at least cost and without damage to the competitiveness of the European industry.
In the staff working paper that accompanied the green paper on market-based instruments for environment and related policy purposes it is acknowledged that the international competitiveness of sectors/companies might be affected negatively, in particular for sectors/companies that:
It is further recognised that the most vulnerable sectors, to which all of the above criteria apply, would be the basic metals and pulp and paper sectors. Eurofer agrees with this assessment. The so-called freedom to choose between investing in “new technologies” (provided they are available) or absorbing any new additional financial burden will de facto lead to a loss of competitiveness.
The environmental performance of the steel industry is regulated under the IPPC Directive. Eurofer supports the IPPC Directive and its integrated approach that takes environmental objectives, local conditions and economic aspects into account in a balanced manner.
The approach of financial instruments conflicts with the integrated approach of IPPC and its BAT-based philosophy since financial instruments, such as taxes or charges, focus only on a given parameter or a set of parameters and do not consider cross media effects. Furthermore, economic instruments imply that there is a choice between applying a better technology and paying. This choice does not exist if Emission Limit Values are set based on Best Available Techniques Associated Emission Levels. The steel industry considers that financial instruments thereby jeopardise the IPPC concept itself and contradict the balanced intentions which were the foundation of the Directive.
In fact, the financial instruments work by disturbing the true balance between environmental benefits and costs, which is fundamental to the IPPC and BAT concepts. As such they constitute a competitive disadvantage for the steel industry.
An emission trading scheme could in theory and under perfect market conditions be an alternative tool to regulate industrial emissions. However, such a system would only make sense if those emissions are not already regulated in a cost-effective way. In any case, should any new emissions trading scheme be introduced, it must remain a voluntary tool at both MS and installation level.
In addition, for all participating installations the two options of either reducing emissions or buying allowances must be available. A third option of reducing production and/or cutting capacities to free allowances is entirely unacceptable under any circumstances. Such a policy would undermine the commitment of industry to invest in maintaining a European manufacturing base and to pursue R&D activities in the European Union. Moreover, the underlying view of a static, frozen economy distorts the integrity of the Internal Market and hampers prosperous economic development and employment.
The steel industry will not support the introduction of any further financial instruments that would introduce additional burdens, thereby reducing the competitiveness of a sector that is operating in a highly competitive global market where regional costs cannot be passed on to its customers without the certainty of any environmental benefits.