According to ArcelorMittal executive chairman Lakshmi Mittal, supportive and clear policies, which are currently lacking, would quickly catalyze significant investment in the transition to a green economy in the European steel industry, with emergency trade measures and adjustments to the Border Adjustment Mechanism being prioritized carbon emissions (CBAM).
Imports must be addressed first. “Intervention is needed to ensure that European steel is better protected, as in the US and Brazil, where the industry is considered strategic. Emergency trade measures would be a strong first signal to address this problem,” Mittal said.
Trade may be free, but it is unfair, he argues. “Fair trade takes on a new dimension when Europe is the only major market with a carbon cost,” he continues. Although it was assumed that everyone would follow Europe's lead in decarbonization, this has not happened and Europe's competitiveness in international manufacturing sectors is declining.
“CBAM should not allow steel imports from countries that circumvent climate protections by selling products to Europe from a few clean plants, and higher emitting steel is sold into domestic and non-EU markets,” Mittal adds. It is currently "inadequately" designed.
Europe must make a choice: does it want to produce iron and steel itself, Mittal continues, or does it want to import it, which could lead to a higher carbon footprint.
Last week, ArcelorMittal announced it was suspending decarbonization investments in Europe due to unfavorable political, energy and market conditions.
Mittal explains that the lack of an enabling policy environment is the reason that ArcelorMittal is unable to make a final investment decision at this stage on projects to replace blast furnaces with low-carbon technologies.
In its proposals for trade measures and CBAM adjustments, Mittal concludes: “I don’t pretend it’s easy, but the problem is not only mechanical, but also political. With new leadership in Brussels and the development of a clean industrial agreement and action plan for steel and metals, now is the time to act."
The European Commission's new head of industry, Stephane Séjournet, confirmed this week that the Commission will consider ways to expand measures to curb steel imports as part of an overall plan to protect the sector as it decarbonises.
