core sector communique

Steel industry supports Commission’s view not to manipulate the EU emissions trading system

On 28^th February a vote is scheduled in the European Parliament on a series of amendments to the Energy Efficiency Directive aimed at the “set aside” of ETS allowances. The aim of this confiscation of allowances is to artificially rise the carbon price which is, as a result of the economic crisis, at very low levels.

However, in an interview with Euractiv last week, Commissioner Hedegaard said “we think it’s important to have a market-based system. None of us should be surprised when there is a huge crisis in Europe, and production is coming down, it is no wonder then that in a market-based system, that demand will come down and therefore also the price. We will be in for so much more trouble if we had a politically regulated system all the time.”

“We absolutely share Commissioner Connie Hedegaard’s view that any manipulation of the EU’s emissions trading market would destroy the whole idea of a market-based system,” says EUROFER’s director general Gordon Moffat. “The low carbon price – which is just a snap-shot of price development – cannot serve as an excuse to introduce a floor price, a set aside or any annulation of allowances, as currently proposed by some groups in the European Parliament.”

The industries covered by the ETS are committed to contribute to the 21% emission reduction obligation by 2020 compared to 2005. Article 1 of the ETS Directive is clear: This Directive establishes a scheme for greenhouse gas emission allowance trading within the Community in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.

Artificially manipulating the ETS to raise carbon prices would be directly contrary to the text of the Directive and an admission by Europe that the ETS, as currently structured simply does not work. It would put in question the very credibility of European climate change policy.

EUROFER continues to support the EU’s objective to reduce CO₂ emissions by 20% by 2020. However we maintain our view that climate change policy must secure equal treatment internationally of globally traded, energy-intensive goods and must provide for European industry the opportunity to function, prosper and grow in the same way as its competitors worldwide.

Represented by EUROFER, the European steel industry is a world leader in its sector with a turnover of EUR 170 billion and direct employment of 360 thousand highly skilled people, producing on average 190 million tonnes of steel per year. More than 500 steel production and processing sites in 23 EU member states provide direct and indirect employment and a living for millions of European citizens.

The European steel industry is the backbone of Europe’s prosperity and an indispensable part of the European supply chain, developing and manufacturing in Europe thousands of different, innovative steel solutions. The European steel industry provides the foundation for innovation, durability, CO2 reductions and energy savings in applications as varied and vital as automotive, construction, machinery, household goods, medical devices, and wind mills.

Steel is 100% recyclable, it can be recycled over and over again without loss of properties. All the steel in collected end-of-life products is recycled, irrespective of the percentage of steel in the products. Steel therefore contributes significantly to the long-term conservation of the fundamental resources for future generations. About 45% of the total EU steel production is recycled steel scrap.