In July, the European Commission proposed a number of support mechanisms and regulatory reforms in an effort to better align the goals of achieving zero emissions with industrial reality. The main changes affected the EU's flagship climate instrument, the Emissions Trading System (ETS).,
,The July 17 proposal contains the European Commission's long-awaited initiative to reform the ETS, as well as an Action Plan for Electrification. According to the chairman of the Commission, Ursula von der Leyen, they are designed to "make Europe the world's first continent powered by electricity."
McCloskey previously reported on how the block's steel companies have built their positions around the ETS debate. As a rule, the two camps are divided into large integrated steel producers, who are most vulnerable to rising regulatory costs for carbon emissions from existing higher-emission enterprises, and new enterprises, secondary producers of EDP and start-up producers, who risk devaluing their investments if the role of ETS as a signal for rising carbon prices is weakened. In many ways, the July package of measures can be considered a continuation of the European Steel and Metals Action Plan (ESMAP) for 2025, which aims to restore the overall competitiveness of domestic steel production in the face of global capacity shortages.
Looking back, ESMAP has fulfilled its obligations to varying degrees, and the most attention has been paid to trade restrictions. The new EU Tariff Quota (TRQ) regime, introduced in early July, was described by McCloskey sources as a "new era" for the EU steel market due to its impact on the international availability of steel to EU countries. The situation is aggravated by the final stage of the Carbon Boundary Regulation Mechanism (CBAM), which creates a significant administrative burden and financial costs for both domestic steel importers and foreign exporters.
At the same time, political support for domestic production within the framework of the ESMAP proved to be more effective. Initially, the official definition of "green" steel in the EU — in the form of "voluntary low—carbon labeling" - was canceled due to planned implementation under the Law on Production Acceleration (IAA), as well as due to thresholds of "Made in the EU" for low-carbon steel in public procurement The European Union.
The European Commission also stated that the "Made in the EU" content requirements for steel are no longer needed, given the new quality control system, as CBAM provides additional restrictions to increase domestic market share. This seems to indicate that the pressure on competitiveness is,