The debate about the future of ETS is expanding with new voices from steel companies
There is increasing scrutiny of the steel sector applying to join the EU's ETS, as more steel producers and climate change interest groups unite in support of preserving the integrity of the EU's main climate protection instrument.
As the deadline set by the European Commission for reviewing ETS approaches expires on July 17, EU steel companies have formed "battle lines" regarding desired outcomes, usually divided between large integrated high-carbon steel enterprises and new low-carbon steel production projects or those that have moved even further in terms of implementation dates. a decarbonization project.
In short, ArcelorMittal Europe, Germany's Thyssenkrupp and Austria's Voestalpine have called for a complete cost freeze on ETS, which is a fundamental aspect of the system, as emission quotas (EUA) are consistently reduced, reducing the supply of EUA amid growing demand (by phasing out free distribution) – until investment opportunities for production low-carbon steel products will not become more obvious, and supporting infrastructure such as the supply of environmentally friendly hydrogen will not be fully established. They are opposed by steel companies SSAB, Outukumpu, Stegra, Hydnum, who claim that weakening the ETS will significantly undermine the carbon cost index on which their projects and investments in decarbonization are based, since the ETS will no longer provide the same confidence that "green" steel will become more competitive than traditional production. steel, as in a timely manner in the carbon market.
Following the start of the latest ETS debate, Outukumpu and SSAB, German integrated manufacturers Salzgitter and SHS group, representing their subsidiaries Saarstahl and Dillinger steel companies, joined the supporters of maintaining the status quo.
In a new call to "protect the integrity of ETS-1," these "European leaders in the field of steel production" sent a joint letter to the member states, in which they supported maintaining the established cost growth factors of ETS "at least until 2035," including maintaining the current phase of free distribution- exit via ipn. the associated costs of the phased implementation of the Carbon Boundary Regulation Mechanism (CBAM).
Since then, some of the leading independent steel producers for the production of secondary electric arc furnaces (EDP) in the EU have also signed an updated version of the letter sent to the EU authorities this week, in which they advocate the preservation of the existing ETS system to maintain (and strengthen) product quality. Effective