Representatives of the European segment of scrap recycling and electric arc furnace production are calling on the European Commission (EC) to review the emerging proposals on the methodology for labeling environmentally friendly steel. They warn that existing approaches may harm the production of EDP based on recycling and undermine existing progress in the field of climate change.
Recycling Europe, a former Euric association that unites EAF steel producers, including Aperam, Pittini, Sidenor, Ovako, Megasa, Duferco, Feralpi, and major scrap metal sellers such as Galloo and Derichebourg, have written to the European Commission.
They recommend that the European Commission avoid using a single sliding scale labeling for all steelmaking industries, arguing that such a system does not take into account the low level of CO2 emissions in the European electric steelmaking industry. The latter accounts for approximately 45% of EU steel production, and it is already largely electrified, operates on a circular system and with low emissions.
The sliding scale concept was developed primarily for the production of coal-based primary steel. Applying the same indicator to the production of EDF would be counterproductive and could disrupt competition by favoring the import of products with higher emissions.
"It is hard for us to believe that the European Commission would pursue such an unbalanced and discriminatory policy and not realize the terrible consequences this would have for half of the EU steel industry and its value chain. We also do not believe that the Commission will lose sight of the political and legal challenges that such a course will inevitably face," reads the letter received by Kallanish.
The signatories of the agreement warn that the "universal for all" label will not reflect the various problems faced by the BF—BOF and EAF routes, and may lead to inconsistent policy outcomes in different markets. They add that the initiatives shaping the sliding scale methodology have so far been conducted almost exclusively with raw material producers, with the result that the recycling segment has been underrepresented.
The signatories warn that inconsistent criteria could lead to the displacement of EDP production in the EU in favor of higher-carbon primary steel from abroad, which would increase Europe's dependence on imported raw materials and undermine decarbonization goals.
They call for a more balanced approach consistent with existing carbon footprint methodologies that include both cycling and decarbonization.
