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Open letter by the CEOs of the EU steel industry to the European Parliament and the member states. Climate, competitiveness and jobs depend on upcoming policy choices.
The European steel industry is a strategic sector for the EU’s green transition, economic resilience and independence. We have clear plans and concrete projects to reduce our sector’s CO2 emissions by at least 30 percent by 2030 and to achieve climate-neutral steel production in the European Union by 2050. These commitments represent a truly industrial revolution that requires a massive €30 billion capital investment in breakthrough technologies over the coming eight years and a significant increase in operational costs stemming from the use of decarbonized electricity and hydrogen.
However, European legislators are now considering proposals on the EU’s Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) that undermine our capacity to invest in these projects and derail the transition to green steel production in Europe.
In Europe, new allocation rules will suddenly reduce the main CO2 benchmark by around 40 percent.
The proposals weaken carbon-leakage protection of our industry in the domestic and global markets, favoring international competitors which are not subject to equivalent carbon costs. In Europe, new allocation rules will suddenly reduce the main CO2 benchmark by around 40 percent — because of one plant that was previously not in the scope — and set a value which no company can achieve in just three years. This is due to a premature transition from the free allocation and indirect cost compensation system to a CBAM which has not yet been tested. Circumvention and resource shuffling are only a few of the many risks that could undermine the CBAM’s effectiveness. Moreover, the CBAM does not yet foresee any measure to preserve the EU’s 20 million metric tons of steel exports per year, worth €45 billion, and the 30,000 jobs that are directly dependent on these.
The proposals also remove massive allowances from the market, further driving the carbon and electricity price in Europe at a time when businesses and households are struggling with skyrocketing energy costs and inflation. Finally, they fail to capture the much higher carbon footprint of stainless steel imports derived from the embedded alloying elements.
Avoid further scaling back existing carbon-leakage protection until the CBAM has proven its effectiveness and a solution for exports is in place.
We call on the European Parliament and Council to immediately address these concerns and in particular to:
● Avoid further scaling back existing carbon-leakage protection until the CBAM has proven its effectiveness and a solution for exports is in place.
● Prevent a sharp decrease in free allocation for existing steel plants which would result from a modification of the benchmark scope. Instead, low-carbon technologies must be rewarded without reducing prematurely benchmark values, at least in the first years when such technologies are introduced at an industrial scale.
The aforementioned changes to the ETS and CBAM will allow us to make the green steel transformation happen now within the EU. Our investments will greatly benefit climate protection, the EU’s industrial competitiveness and hundreds of thousands of jobs across the EU.
Geert Van Poelvoorde, CEO, ArcelorMittal Europe Bernhard Osburg, CEO, thyssenkrupp Steel Europe AG Henrik Adam, Chairman of the Board, Tata Steel Netherlands Holding Francesc Rubiralta Rubio, Chairman and CEO, CELSA Group Olavi Huhtala, CEO, SSAB Europe Mario Caldonazzo, CEO, Arvedi Hubert Zajicek, CEO, voestalpine Steel Division Lorenzo Riva, CEO, Riva Stahl GmbH Gunnar Groebler, CEO, Salzgitter AG Timoteo Di Maulo, CEO, Aperam Karl-Ulrich Köhler, Chairman of the Board, SHS-Stahl-Holding-Saar Gmbh &Co Ajay Aggarwal, President of the Board, Liberty Galati Heikki Malinen, President and CEO, Outokumpu Oyj Jan Czudek, CEO, Třinecké železárny Bernardo Velázquez Herreros, President, UNESID – Spanish Steel Association José Enrique Freire Arteta, President, Megasa Hans Jürgen Kerkhoff, President, Wirtschaftsvereinigung Stahl James E. Bruno, President, US Steel Košice Zlatislav Ivkov, General Manager, Stomana Industry S.A. Markus Ritter, CEO, Marienhütte Stahl & Walzwerk GmbH George Michos, CEO, Sidenor Group Vasileios Goumas, CEO, Hellenic Halyvourgia Markus Menges and Florian Glück, Managing Directors, Badische Stahlwerke GmbH Roberto Re, CEO, Metinvest Europe Radek Strouhal, CEO, Vítkovice Steel Giuseppe Pasini, President, Feralpi Group Claudio Riva, President, Riva Acciaio Alessandro Banzato, CEO, Acciaierie Venete Antonio Marcegaglia, President and CEO, Marcegaglia Steel Giuseppe Lucchini, President, Lucchini Rs Michele Della Briotta, President Europe, Tenaris Klaus Enwald, CEO, Ovako Imatra Oy Ab Alexander Becker, CEO, GMH Gruppe José Jainaga, CEO, Sidenor Aceros Especiales Carlos Alvarez, CEO, Aceros Inoxidables OLARRA, S.A. Andrey Zubitskiy, President of the Management Board, SIJ Group Francisco Irazusta, Executive Chairman, Tubos Reunidos SA Christian Wiethüchter, CSO | COO, BENTELER Steel/Tube GmbH Nicos Georgakellos, President, ENXE – Hellenic Steelmakers Union Ionel Bors, President, UniRomSider – Romanian Steel Producers’ Union Stefan Dzienniak, President of the board, HIPH – Polish Steel Association Roman Stiftner, Managing Director, Austrian Mining and Steel Association Ivan Jurkošek, General Manager, Štore Steel Annika Roos, Managing Director, Jernkontoret Kimmo Järvinen, Managing Director, Metallinjalostajat Philippe Coigné, Director General, Groupement de la Sidérurgie Bruno Jacquemin, Délégué Général, A3M Daniel Urban, Chairman, Ocelářská unie Anton Petrov, Chairman of the Board, Bulgarian Association of the Metallurgical Industry Ianc Petru, Executive Manager, UNITUB – General Union of Romanian Tubes Producers Michel Tellier, CEO, Reinosa Forgings & Castings Timo Rautalahti, CEO, Boliden Harjavalta François Michalet, Secretary General, ESTA – European Steel Tube Association Alexis Van Maercke, Secretary General, APEAL Klaus Peters, Secretary General, ESTEP – European Steel Technology Platform Axel Eggert, Director General, The European Steel Association (EUROFER)
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