SteelOrbis talked to Sebastian Will, member of bvse executive committee, about decarbonization actions in EU.
bvse e.V. and its members welcomed CBAM as it was a vital, market-conforming part of paving the way towards a carbon-neutral future in EU production and a keystone of furthering market-based recycling in the EU.
CBAM in conjunction with ETS2 held every promise to propel the vital transformation from carbon-intensive production, with all geopolitical dependencies. Also, it had the potential to force large industrial complexes to reconsider their inefficient, outdated processes. The majority of the steel industry, for example, has relied on the cheapest, most CO2-intensive technology for producing steel over the last decade or so, while at the same time getting handout CO2 certificates way in excess of their actual need and selling them with considerable profits to less fortunate industries.
CBAM was considered to be the initial spark and at the same time protector of the transition towards more cost-intensive green production, guarding the EU markets against perceived unfair and - in terms of carbon emissions - filthy competitors.
ETS2 was complementing the transition by reducing the number of free emission certificates and simultaneously applying market mechanisms to force investment in greener, aka less energy- and CO2-intensive, technologies, relying in most cases on recycled raw materials.
These resources - readily available in a mature, wealthy and consumption-oriented realm such as the EU and Germany - would have become the backbone of the strategic efforts towards autarky undertaken by the EU, since at least 2022. Everything we need - rare earths, strategic metals and minerals - is available via products consumed on a daily basis, just waiting to be recovered at their respective ends of life.
The willingness to develop and invest within the recycling industries in Germany and the EU as a whole was thus at its peak. Advanced recycling technologies like LIBS became available to the industry, along with other cutting-edge sorting and classification technology. Pilot investments were started in both the recycling and base material-producing industries but … the politicians failed to pull through...again.
In light of rising energy, bureaucratic and labor costs, flanked by a shrinking industrial sector, the European Commission decided to serve those who believed in and claimed to support the transition policy established in 2019’s green deal. Steel mills like Salzgitter and Saarstahl in Germany wanted to be early adopters, while others in the same industry just played for time. As a result, billions of taxpayers’ and shareholders’ money were invested into real green steel production projects, only to be lost in the end. Along with the multinational automotive industry being in dire straits, the EU decided to go back on their promise of a bright and clean future and cancelled the strict CBAM measures for 90 percent of market participants currently thinking about delaying ETS2.
The result was the cancellation of further investments in advanced sorting and refining technology as marketability prospects suddenly declined along with the willingness of the customers to pay extra for recycled content. Industry customers buried their cost-intensive projects, further reducing the use of additional recycling investments.
Along with plans to raze ETS2, as well as politicians falling prey to import as well as export restrictions, CBAM is no longer part of the solution for the recycling industry but is rather becoming a problem. The industry is leaving the EU and SMUs from abroad now supply the base components of our lives. We are recycling an increasing amount of material for declining local demand. Exports will perhaps be forbidden in the near future or at least made difficult. You do not need to be an economics Nobel laureate to see where this is going for the recycling industry in both Germany and the EU.