The joint statement issued by ArcelorMittal Europe, thyssenkrupp Steel, and voestalpine — three of Europe’s leading steel producers — warned that if the necessary regulatory changes are not implemented, the current trajectory could have devastating effects on Europe’s industrial base.
European steel producers: current ETS puts industrial base at risk
In an article published in the Financial Times, ArcelorMittal Chairman Lakshmi Mittal conveyed the shared position of the three companies, emphasizing that the EU Emissions Trading System (ETS) must be reassessed to protect European steel production and the broader industries dependent on it. Together, the three major producers account for approximately 60% of integrated steel production in Europe, placing them at the core of the EU’s industrial value chains. While the companies stressed their commitment to decarbonization, they stated that the current policy framework makes this transition more difficult and should be adjusted to become more enabling.
ETS costs rising rapidly, support mechanisms insufficient
The statement recalled that the ETS has delivered significant emissions reductions, particularly in the energy sector, where emissions fell by around 49% between 2005 and 2023. However, it noted that a viable and sustainable decarbonization pathway has not yet been established for energy-intensive sectors such as steel. The companies highlighted that key elements of economic decarbonization — including competitive electricity prices, affordable green hydrogen supply, carbon contracts for difference, carbon capture and storage technologies, and early markets for low-carbon steel — are still underdeveloped and not widely accessible.
50% cost increase in steel production and rising competitive pressure
Under the current ETS framework, steel production costs in the European Union are expected to increase by approximately 50% in the early 2030s, placing significant pressure on the sector. It was also noted that steel-intensive imported products are not subject to equivalent carbon costs, while EU steel exports do not benefit from any compensation mechanism for carbon costs, factors which could distort competition against Europe. In this context, sharp increases in ETS costs would negatively affect not only steel production but the entire value chain.
5 million jobs at risk
The three companies estimate that, without ETS reform, steel-intensive manufacturing activity in the EU could decline by 30% to 40%. If this scenario materializes, approximately 5 million jobs across the value chain could be at risk, with severe consequences for the European economy. This outcome would also conflict with the EU’s Industrial Accelerator Act target of increasing manufacturing’s share of GDP to 20%, and would significantly weaken Europe’s economic resilience in an increasingly competitive global environment.
The companies reiterated their support for Europe’s climate goals and their commitment to decarbonization, while stressing that the ETS must be aligned with the realities of industrial transformation.
Temporary pause on ETS costs needed
Among the joint demands, the three producers called for a temporary suspension of ETS cost increases until economically viable decarbonization conditions are in place. They argued that current levels should be maintained and that a framework should be created to support early-stage decarbonization projects and enable pioneering investments. They also proposed directing ETS revenues toward industrial decarbonization and using these funds to accelerate the transition process, as well as developing mechanisms to balance import and export competitiveness.
Carbon Border Adjustment Mechanism important but not sufficient
It was stated that the recently implemented Carbon Border Adjustment Mechanism (CBAM) and the upcoming Tariff Rate Quotas represent important steps toward ensuring fair competition, but that ETS reform remains a necessary complementary element. The companies emphasized that ETS reform is critical for both achieving Europe’s climate targets and maintaining a strong industrial base.
Balancing industrial and climate goals intensifies
thyssenkrupp Steel CEO Marie Jaroni stated that the current ETS does not reflect the realities of European industry, noting that balancing competitiveness with transformation goals is becoming increasingly difficult. She stressed the need for a cost “pause mechanism” within ETS to ensure the transition is secured and pioneering companies are not placed at a disadvantage.
voestalpine AG CEO Herbert Eibensteiner highlighted significant investments under the company’s Greentec Steel program and its ambition to substantially reduce emissions in the coming years. However, he noted that the gradual removal of free allowances under current economic conditions diverts necessary financial resources away from critical stages of the transformation process. He added that a temporary ETS pause is needed until appropriate conditions are established to ensure sustainable decarbonization progress.
ArcelorMittal Chairman Lakshmi Mittal stated that an ETS model combining competitiveness and decarbonization is possible. While acknowledging the difficulty of the process, he said reform is inevitable and welcomed renewed attention from European policymakers. Mittal emphasized that the real choice facing Europe is not between climate goals and competitiveness, but between a climate strategy that strengthens economic resilience and security, and one that undermines them.
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