EC warned of post-2020 carbon leakage risk for steel
The steel industry's carbon and investment leakage risk must be taken into account when developing a post-2020 climate policy framework, the European Commission was warned on Tuesday. The sector is one of the biggest holders of surplus EU allowances (EUAs) in the bloc's emission trading system (ETS).
The call came from a high-level meeting attended by industry, EU member states and trade unions and convened by the European commissioner for industry and entrepreneurship, Antonio Tajani, and commissioner for employment and social affairs, Laszlo Andor.
On Tuesday, the group adopted recommendations including measures on climate change, energy and environment to help Europe's steel sector retain its long-term competitiveness during the current "extremely challenging" economic conditions.
European steel lobby Eurofer said early this month that market conditions for steelmakers will remain difficult in 2013, after a bleak 2012 (see EDCM 5 February 2013).
"Reducing CO2 emissions generated from steel production creates economic pressure on EU-based producers and this must be duly taken into account when adopting regulatory measures," the roundtable group's draft recommendations document reads.
Among the measures suggested are:
e_SBlt "urgently" developing the post-2020 climate policy framework;
e_SBlt creating national "funding schemes" for developing new technologies, partly financed by revenues from the ETS;
e_SBlt improving the ETS by taking "global competitiveness issues" into account;
e_SBlt setting up a European mechanism to monitor data on CO2 emissions and energy efficiency of steel plants.
The Commission, which is to prepare an action plan for Europe's steel industry by June, has not endorsed the recommendations.
But Connie Hedegaard, the EU commissioner for climate action, has criticised them.
After they were made public, she commented on Twitter that, of the total cost of steelmaking, ETS-related costs account for only 2% at most while raw materials, capital, labour and transport cover the rest.
"If we don't get the diagnosis right, we won't get the cure right," she wrote. "Competitiveness, also in [the] steel sector, must be based on facts, not myths."
Pointing directly to steel giant ArcelorMittal's $200m (€149m) revenue from the sale of carbon credits for its business in 2012 (see EDCM 6 February 2013), she added: "The steel sector has not lost money because of the ETS. Some have earned millions."
The steel sector's surplus on carbon is a major reason for the chronic oversupply that has made prices plunge in the carbon market (see EDCM 13 April 2012).
The roundtable panel also said the Commission's proposal to back-load 900m EUAs in phase III of the ETS "will inevitably add to the carbon price in the short term" but that it will also increase the value of the surplus. "However, this [surplus] is not held by all steelmakers," it said. Silvia Molteni
Other Related Stories