ArcelorMittal, ThyssenKrupp, and Voestalpine Demand Reform of the EU ETS
Three of Europe's leading steelmakers are jointly calling for an adaptation of the European Union's Emissions Trading System (ETS). ArcelorMittal, thyssenkrupp Steel, and voestalpine warn that without adjustments, the current architecture could undermine the competitiveness of the continent's steel industry and hinder its energy transition.
The Cost of Quotas Incompatible with Industrial Decarbonization
The three groups, which account for about 60% of integrated steel production in Europe, point to an increase in ETS costs without the necessary tools for economically viable decarbonization being developed at the required scale. According to their analysis, the cost of steel production in Europe will increase by about 50% by the early 2030s under the current ETS regime. They emphasize that European steel is penalized by an asymmetry: steel imports do not incur an equivalent carbon cost, while European exports do not benefit from any mechanism to compensate for the additional carbon cost. This disparity, in the context of a significant increase in ETS costs, creates, according to them, a sharp competitive disadvantage for continental steelmaking.
Five Million Jobs at Risk in the Value Chain
The three steelmakers estimate that without ETS reform, the European Union could see a 30 to 40% decline in its steel-intensive manufacturing activity, jeopardizing up to 5 million jobs across the entire value chain. Such a scenario would contradict the goals set by the Union in the Industrial Accelerator Act, which aims to increase the manufacturing sector's share of GDP to 20%. They specify that this direction would weaken Europe's economic resilience in the face of increasing global competition.
Call for a Moratorium and Targeting of ETS Resources
ArcelorMittal, thyssenkrupp Steel, and voestalpine make four demands. They first call for a temporary moratorium on the escalation of ETS costs, maintained at the current level until key tools—competitive electricity, affordable green hydrogen, carbon contracts, carbon capture and storage, demand markets for low-carbon steel—are effectively available. They then request a framework that supports decarbonization pioneers, allowing early movers to proceed with confidence. They demand that ETS revenues be directed towards industrial decarbonization to accelerate the transition. Finally, they call for a rebalancing of competitiveness at the borders, recognizing that the recently introduced Carbon Border Adjustment Mechanism (CBAM) and future tariff quotas are steps, but that ETS reform is the missing link to reconcile decarbonization with a robust industrial base.
