The letter claims that
European legislators are now considering proposals on the EU’s ETS, and the
carbon border adjustment mechanism (CBAM) that ‘undermine’ EUROFER’S capacity
to ‘invest in these projects and derails the transition to green steel
production in Europe.’
In Europe, new allocation rules will reduce the main CO2 benchmark by around 40%, Eurofer says.
''The proposals
weaken carbon-leakage protection of our industry in the domestic and global
markets, favouring international competitors which are not subject to
equivalent carbon costs.''
Statement from
Eurofer's open letter to the European Parliament and member states
The letter reads: ‘The proposals weaken carbon-leakage protection
of our industry in the domestic and global markets, favouring 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% — 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 Mt of steel exports per year, worth €45 billion, and the 30,000
jobs that are directly dependent on these.’
Eurofer has called on the European Parliament and council to
‘immediately’ address its concerns by avoiding ‘further scaling back existing
carbon-leakage protection until the CBAM has proven its effectiveness and a
solution for exports is in place’, and ‘preventing a sharp decrease in free
allocation for existing steel plants which would result from a modification of
the benchmark scope.’