Brussels/Paris, 15 December 2015 – The European Steel Association (EUROFER) welcomed the global agreement concluded last weekend at the 21st Conference of the Parties (COP21) climate conference. The agreement is a historic step towards to limiting climate change to less than 2°C compared to pre-industrial levels. However, the agreement lacks a comprehensive strategy as to how to achieve the intended objectives and lacks the level playing field that would protect Europe’s industry from carbon leakage.
Speaking after the conclusion of the COP21 negotiations Axel Eggert, Director General of EUROFER, said, “This agreement treads the right path towards mitigating anthropogenic climate change. If correctly implemented, it would be a milestone on the way to a more environmentally-friendly future.”
“However, the agreement does not create a level playing field for European industry. Third country competitors will continue to face far lower environmental burdens. Europe’s steel industry is amongst the cleanest and most advanced in the world. Accordingly, if it collapses due to ‘carbon leakage’ – compounded by ongoing unfair trade practices from non-EU countries – then Europe will simply have exported its CO2, as well as hundreds of thousands of jobs”, stressed Mr Eggert.
“It is clear that so long as no equal measures exist for industrial competitors globally, the EU’s most significant climate policy, the Emissions Trading System (EU ETS), will have to be shaped in a way that guarantees – at least at the level of the 10% most efficient steel plants in Europe – that the system does not result in any costs”, added Mr Eggert.
Mr Eggert concluded, “Accordingly, as European member states move to ratification of the Paris agreement, they must think on developing domestic and EU-level policies that implement their commitments to global climate protection but that also guarantee jobs, growth and investment at home.”
A recent ECOFYS report highlighting how the European steel industry would be affected by the current fourth EU Emissions Trading System (EU ETS) proposal is available here: www.ecofys.com
About the EUROFER EU Emissions Trading System Position
In its recent EU ETS position paper, EUROFER outlined a number of potential solutions that would reduce the cost burden. These measures include:
100% free allocation at the level of the 10% best performing installations for sectors at risk of ‘carbon leakage’
Realistic benchmarks based on real data from the most efficient installations, reflecting actual technological progress,
Removal of the linear reduction of benchmarks and the cross sectoral correction factor in order to prevent the free allocation falling below technically and economically feasible levels,
Compensation for indirect carbon costs at the level of best performers in all member states.
The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €170 billion and directly employs 330,000 highly-skilled people, producing on average 170 million tonnes of steel per year. More than 500 steel production sites across 24 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.
Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.