From 76 CEOs of the European steel industry to EU Heads of State and government

An ambitious European Union Emissions Trading System must work for the environment – and support jobs and industry

To the Heads of State and governments of the European Union,

We, the undersigned CEOs of the European steel industry, are writing to you ahead of the final negotiations on the reform of the EU Emissions Trading System (EU ETS).

We agree that climate change is a critical issue that urgently needs to be addressed at international level, and we fully support efforts to reduce CO2 emissions cost effectively across the whole EU economy.

In the weeks ahead, you will have the final opportunity to shape an EU ETS that better addresses these objectives while preserving Europe’s steel industry and the millions of employees it supports. 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.

The steel sector pulls its weight in lowering CO2 emissions. However, with technically unachievable steel benchmarks, the EU ETS legislation creates high carbon costs for even the best performing steel plants, despite the fact that the sector has been unambiguously recognised in the European Commission’s own Impact Assessment as being at very high risk of carbon leakage. In its current form, the EU ETS favours steel imports from third country competitors that do not have such costs and which have a far higher carbon footprint than steel made in the EU.

Were the EU ETS directive to be adopted without some of the improvements requested by the European Parliament there would be a shortage of emissions allowances for our industry of around 35% by 2030. There will be no spare allowances from previous years available to alleviate the impact of the post 2020 period in the steel industry. In addition, the sector would be even more exposed to the carbon cost pass-through in electricity prices. Other industry sectors under the EU ETS do not face these constraints to the same degree.

We therefore call upon you to help preserve the sustainability and global competitiveness of the European steel industry. Europe must be able to produce the innovative steels that underpin modern society - and that help reduce CO2 emissions.

It is essential that the improvements that have been agreed by the European Parliament on waste gases, auctioning share, cross sectoral-correction factor and indirect costs are also adopted by the Council. This will help to ensure reform that encourages climate protection and the fulfilment of the EU’s CO2 reduction commitments, while also limiting the impact upon the European steel industry’s competitiveness, ability to innovate and the jobs it supports.

Source: http://www.eurofer.be