ArcelorMittal Europe, thyssenkrupp Steel and Voestalpine have jointly called for reforms to the EU Emissions Trading System (ETS), arguing that the current framework risks undermining the competitiveness of Europe’s steel industry.
The companies stated that they remain committed to decarbonizing their operations but believe the existing policy framework does not adequately support the transformation required by the steel sector. Together, the three steelmakers account for around 60 percent of Europe’s integrated steel production.
Companies cite missing conditions for decarbonization
According to the companies, while the ETS has contributed to emissions reductions in the power sector, several key conditions required for economically viable industrial decarbonization remain insufficiently developed. These include competitive electricity prices, affordable green hydrogen, carbon contracts for difference (CCfDs), carbon capture and storage technologies, and lead markets for low-carbon steel. The companies stated that under the current framework, steel production costs in the EU could rise by around 50 percent by the early 2030s.
Meanwhile, the steelmakers argued that imported steel-intensive products are not subject to equivalent carbon costs, while EU steel exports receive no compensation for carbon costs incurred under the ETS. According to their estimates, the absence of reforms could result in a 30-40 percent decline in steel-intensive manufacturing activity in the EU and place up to 5 million jobs across the value chain at risk.
Industry proposes temporary pause in ETS cost increases
To address these concerns, ArcelorMittal, thyssenkrupp Steel and Voestalpine are calling for a temporary pause in ETS cost increases until the conditions necessary for economically viable decarbonization are established. The companies also advocate directing ETS revenues toward industrial decarbonization projects, creating mechanisms to support early decarbonization investments and introducing measures to address competitiveness challenges related to both imports and exports. They acknowledged the introduction of the Carbon Border Adjustment Mechanism (CBAM) and the planned Tariff Rate Quotas as positive steps toward creating a more level playing field but argued that further ETS reform remains necessary.
Industry leaders stress need for balanced climate policy
Thyssenkrupp Steel CEO Marie Jaroni stated that the ETS must better reflect the challenges facing European industry and called for a pause in ETS cost increases to support industrial transformation and first-mover investments.
Voestalpine CEO Herbert Eibensteiner said the phase-out of free ETS allocations is already diverting financial resources away from decarbonization projects and argued that a pause in ETS cost escalation is needed until enabling conditions are in place.
ArcelorMittal Executive Chairman Lakshmi Mittal stated that reforming the ETS is essential to ensure decarbonization can progress without undermining industrial competitiveness, adding that Europe’s climate strategy should also support economic resilience and security.
