Brussels/Paris, 1 December 2015 – The COP21 climate change conference has just begun, so the European Steel Association (EUROFER) reasserts the hope that negotiators can come to a comprehensive and global agreement. A legally binding arrangement with comparable commitments and obligations has the greatest potential to tackle the climate change challenge.
“EUROFER calls on policy makers to make sure that any Paris agreement not only mitigates, insofar as possible, the risk of carbon leakage but also incentivises investments in Europe. Energy-intensive industries exposed to fierce global competition, such as steel, should be able to compete in a fair way whilst on their way to decarbonisation”, said Axel Eggert, Director General of EUROFER.
The steel industry has outlined a number of objectives that it wishes to see in any agreement:
- A legally binding framework with transparent and comparable emissions reduction commitments from major emitters leading to comparable reduction obligations for competing industries countries worldwide.
- Effective and equivalent international measurement, reporting and verification obligations to all parties
- Use of market-based instruments (international credits) with a view to cost-effective mitigation action
- A binding dispute settlement regime and clear sanctioning rules
- Protection of intellectual property rights for technology dissemination and deployment
Mr Eggert added, “Presently, Europe is unilaterally imposing costs on its energy-intensive industries. Without an international agreement, with comparable commitments and obligations from third countries, there is the risk that this unilateral policy could dissolve Europe’s industry in climate costs, whilst simultaneously failing in the EU’s aim to reduce global emissions.”
“The European steel industry is a supporter of action on climate change: indeed, a recent BCG study demonstrated how the use of steel in eight advanced applications could mitigate 443 million tonnes of CO2 per year. However, we must emphasise that these CO2 reduction efforts must be done worldwide in order to be effective,” concluded Mr Eggert.
ECOFYS Report
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 full position paper is available at: www.eurofer.eu
About the European steel industry
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.