In an open letter EUROFER urges the European Commission to protect the competitiveness of European steel industry and to provide a stable foreseeable policy framework when adopting the revision of the EU emissions trading system.
The Steel Industry wants to remain in Europe
Dear President Barroso, dear Commissioners,
Today, in adopting the Commission proposal on the revision of the EU emission trading system (EU ETS) you will be deciding on the future of the steel industry in Europe, which of course has been at the very core of the EU’s foundation since 1952.
The European steel industry employs 370 000 people directly and 1 million people directly and indirectly. The steel value chain of suppliers, and down stream industries employs 22 million people in Europe. The European economy relies on steel. Climate change policies which do not address the competitive situation of the industry risk breaking this value chain.
The European steel industry is committed to the EU objective to reduce carbon emissions and is willing to share the burden to meet the EU target of a reduction of CO2 emission by 20 % in 2020 compared to 1990.
We have already done a lot – over the past 30 years emissions per tonne of steel produced have been cut by more than 60 %. Even if available CO2 mitigation technologies for steelmaking are reaching their maximum potential we are prepared to do more. We are investing massively in ambitious research and development projects with the aim to produce better and lighter steels. Steel is infinitely recyclable so that the life cycle CO2 impact is very positive compared to other materials. This should be taken into account in any regulatory systems.
However our ability to invest in Europe depends on the correct policy framework. The proposals for the post-2012 emission trading scheme, which will be made by the European Commission will be critical.
The head of states of the European Union gathered in the European Council have correctly identified the need for the Commission, when drawing up proposals for the new climate change policies, to protect the competitivity of European energy intensive industries. That this is necessary is confirmed by the impact assessment of the proposals made by the Commission itself.
We urge the Commission therefore to adopt clear detailed proposals which rather than hinder our ability to invest will actually help us to improve the chances of a global reduction in emissions:
• Rather than a cap based on the NAP 2008-12, adopt internationally agreed benchmarks of CO2 intensity as a means of determining allocations.
• Auctioning for steel would be extremely damaging and counter-productive. Until an international agreement sets the rules globally, free allowances to the steel industry but tailored to sector performance indicators eg benchmarks;
• Provision for global sectoral agreements. This would deliver CO2 reduction without relocation effects;
• Measures to compensate the pass-through of costs for electricity;
Business needs stability and predictability if it is to operate successfully. We urge the European Commission to provide us with a stable foreseeable policy framework by providing clear precise proposals today on the climate change rules which will affect the steel industry in 2013-2020.