Eggert stated that the European Commission expects the European steel sector to decarbonise by this date under the regulation, which foresees the phase-out of free emission allowances by the end of 2033. However, he stressed that the sector’s most critical question remains unanswered, as it is still unclear where affordable electricity and hydrogen will come from.
Noting that companies are expected to make multi-billion-euro investments, Eggert said it remains uncertain whether electricity and hydrogen infrastructure will be ready on time, whether sufficient volumes of clean electricity will be available, and whether these resources will be supplied at prices that allow the EU steel industry to maintain its global competitiveness.
According to EUROFER, the proposed regulation on the phase-out of free emission allowances does not eliminate investment uncertainty facing the sector. In particular, maintaining the planned reduction in free allowances for the steel sector during 2029-2030 and the risk of a sharp decline in the main steel benchmark under the benchmarking rules in 2031 could weaken both carbon leakage protection and incentives for companies that invest early.
Eggert also noted that the proposal once again does not include the long-awaited structural solution for exports under the Carbon Border Adjustment Mechanism (CBAM). He added that the new conditions for free allowances create additional administrative burdens and legal uncertainty, particularly in cases where investment decisions depend on factors outside companies’ direct control.
Eggert stated that the European Union has set ambitious climate targets, but the necessary infrastructure and supporting conditions repeatedly promised by member states have not yet been established to achieve these goals. He commented, “Unless these conditions are provided, the ETS only sets a deadline but does not offer a credible roadmap to achieve this target.”
Reminding that the European steel sector is already investing to replace around 35% of its conventional steel production capacity with hydrogen-ready facilities between 2030 and 2032, Eggert stressed that expecting the sector to achieve 100% decarbonisation by 2033 without the right conditions is not realistic.
Eggert concluded that if the European Commission fails to deliver on its commitments regarding clean energy, hydrogen infrastructure and competitive energy costs, Europe risks losing a significant part of its steel industry rather than successfully decarbonising it.
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