Finland-based stainless steel producer Outokumpu has welcomed the European Commission's proposal to review the EU Emissions Trading System (EU ETS) for the 2031-40 period, describing the ETS as the EU's primary instrument for reducing industrial emissions and supporting the transition to a competitive low-carbon economy.
The company stated that the Commission's proposal maintains the ETS as the core mechanism for pricing carbon emissions and encouraging investment in cleaner technologies.
Call for strong and predictable carbon pricing
While the proposal includes adjustments to the phase-out of free emission allowances and the Linear Reduction Factor (LRF), Outokumpu stressed that a strong and predictable carbon price must be preserved to continue rewarding early investments in decarbonization.
Outokumpu said it does not support the Commission's proposal to delay the previously agreed phase-out of free emission allowances, arguing that such a measure would weaken incentives for industrial decarbonization, reduce the effectiveness of the Carbon Border Adjustment Mechanism (CBAM) and send the wrong signal to companies that have already invested in emissions reductions. The company added that while it supports aligning the LRF with the EU's 2040 climate targets, any changes to the proposed annual reduction rate of 4.4 percent should be kept to a minimum to avoid weakening the EU's climate ambition and leadership.
Outokumpu supports stronger CBAM and ETS investment funding
The company reiterated that a strong ETS combined with a fully implemented and effective CBAM remains essential to prevent carbon leakage and maintain a level playing field for low-carbon production as free emission allowances are gradually phased out.
Outokumpu welcomed the Commission's proposal to reinvest ETS revenues into industrial decarbonization through instruments such as the Innovation Fund and the Industrial Decarbonization Bank. Directing ETS revenues toward industrial decarbonization will accelerate the deployment of low-emission technologies while rewarding companies that continue investing in the transition.
The company also stated that the proposed inclusion of permanent carbon removals within the ETS could create new long-term opportunities for Outokumpu as it develops sustainable biomass-based solutions and explores carbon capture technologies to further reduce emissions.
Lastly, Outokumpu said it will further assess the implications of the Commission's proposal and continue participating in the legislative process to support a policy framework that strengthens both European industrial competitiveness and the EU's climate objectives.
