The European Steel Association Eurofer has written an open letter to the European Parliament and member states on changes to the EU Emissions Trading System (ETS), which the association believes will "disrupt" the transition to green steel production in Europe.
This was reported by the publication with reference to a letter from Eurofer to the European Parliament Steel Times International.
The letter says European lawmakers are currently considering proposals for the EU's ETS and the Carbon Border Regulation (CBAM), which "undermine EUROFER's ability to invest in these projects and slow down the transition to green steel production in Europe".
The association stressed that in Europe, the new allocation rules would reduce the basic CO2 benchmark by about 40% - through a single plant that was not previously covered - and set a value that no company could achieve in just three years. This is due to the premature transition from a free distribution system and indirect reimbursement to a CBAM system that has not yet been tested. Bypassing and shuffling resources are just some of the many risks that can undermine the effectiveness of CBAM.
"These proposals weaken our industry's protection against carbon leakage in domestic and global markets, favoring international competitors that are not subject to equivalent carbon costs," the letter said.
Moreover, CBAM does not yet envisage any measures to save 20 million tons of steel exports from the EU worth 45 billion euros a year and 30,000 jobs that directly depend on it, the association added.
With this in mind, Eurofer called on the European Parliament and the Council to avoid "further reducing existing carbon leakage protection until CBAM proves its effectiveness and a solution is found for exports".
"Low-carbon technologies should be rewarded without a premature reduction in benchmarks, at least in the first years when such technologies are implemented on an industrial scale," they added.
Before EcoPolitics reported that The Committee on the Environment has voted in the European Parliament for the Border Carbon Regulatory Mechanism (CBAM) and the reform of the Emissions Trading Scheme (ETS), which are tools to achieve the EU's climate targets under the Fit for 55 package.