The steel industry is actively tackling climate change but to do more it requires the correct policy framework. We call upon the Member States and the European Parliament to address the shortcomings in this proposal over the coming months.
EUROFER, the European Confederation of Iron and Steel Industries, notes the commitment of the European Commission that certain energy intensive industries exposed to global competition will be granted free allowances in the absence of an international agreement. Furthermore, the Commission acknowledges that the impact of electricity prices on certain sectors like the steel industry has to be addressed and that it considers global sectoral agreements as a positive tool to tackle climate change.
Nevertheless, we consider that the current proposal has significant shortcomings which are unacceptable. Steel companies need a clear and predictable framework for further investments in Europe. These proposals do not provide that.
1. The choice of 2005 as the base year for emission reduction of 21% by 2020 ignores the 20 % reduction already achieved by the steel sector in relation to 1990, the previously acknowledged Kyoto accord reference year. Any shortfall in allocations will result in higher costs creating a competitive disadvantage with steel industries outside the EU and production cuts which will force cuts in European jobs.
2. We need guarantees that fully 100% of allowances will be granted free in the absence of an international agreement.
3. Massive rises in electricity prices as a result of the present emission trading system have already affected European competitivity. Further rises as a result of these proposals must be prevented. This is not guaranteed in the current proposal.
4. The scope of energy intensive industries covered by the directive is unclear at this stage.
The steel industry is actively tackling climate change but to do more it requires the correct policy framework. We call upon the Member States and the European Parliament to address the shortcomings in this proposal over the coming months.
Represented by Eurofer, the European steel industry is the world leader in its sector with a turnover of EUR 140 billion and direct employment of 370 thousand people, producing 200 million tons of steel per year.
Contact
Gordon Moffat, Director General +32 2 738 79 26 (g.moffat@eurofer.be)
Axel Eggert, Director Public Affairs +32 2 738 79 34 (a.eggert@eurofer.be)