The statement emphasizes that a science-based and ambitious methodology is essential for the decarbonisation of the steel sector.
The signatories expressed their support for the methodology developed by the European Commission’s Joint Research Centre (JRC), while arguing that the ambition level of the performance classes assigned to steel products under the Delegated Act should be significantly increased. According to the organisations, this is necessary to reduce Europe’s dependence on third countries and to direct investment toward low-carbon and fossil-free technologies.
The statement notes that the technology-neutral approach adopted by the JRC currently represents the most appropriate methodology for steering the transition toward low-carbon technologies. Based on a cradle-to-gate assessment and fixed performance thresholds, the system recognizes the decarbonisation potential of recycled steel scrap.
Unlike alternative methodologies that may discourage circularity and increase the European Union’s dependence on primary raw materials with a higher environmental footprint, the JRC approach is said to channel investments toward technologies that utilize the most sustainable raw materials and production processes. In this context, primary fossil-free steel production using hydrogen-based direct reduced iron (DRI) and electric arc furnace (EAF) technologies would be rewarded, helping to achieve EU climate and environmental objectives while avoiding lock-in effects associated with carbon-intensive technologies.
The statement further highlights that the JRC methodology would encourage investment in production pathways that strengthen Europe’s open strategic autonomy. By assigning a lower carbon footprint to products with high recycled content, demand for iron ore and concentrates—much of which is imported from outside the EU—would be reduced. The widespread availability of scrap in Europe is expected to support this transition and, even under increased demand, would not create supply shortages for European steel producers. As a result, dependence on third-country imports of primary raw materials could be significantly reduced.
The signatories also warned that adopting a different methodology at this stage could delay the implementation of the Green Steel Label and create additional uncertainty for investors. They noted that the JRC methodology is aligned with ongoing work under the ESPR framework for other materials, such as aluminium, through the use of the MEERP Life Cycle Assessment methodology, as well as with the Construction Products Regulation (CPR) framework. A different approach, they argued, would complicate the EU regulatory framework and potentially create unintended advantages for certain materials over others.
The statement additionally stresses that increasing the ambition level of performance thresholds is necessary to accelerate decarbonisation in steel production. While acknowledging that the JRC methodology provides a balanced framework, the organisations called for significantly stricter benchmarks for product-specific performance classes. They argued that the current thresholds are overly conservative and would not provide sufficient incentives for investment in low-carbon and fossil-free technologies if adopted under the Delegated Act.
According to the statement, the existing performance classes would be unable to drive meaningful market transformation or adequately distinguish products with the lowest carbon footprints.
Hot-rolled coil (HRC), a flat steel product predominantly produced within the EU through the blast furnace-basic oxygen furnace (BF-BOF) route, was cited as an example. The B performance class currently covers emissions ranging from 1.79 to 2.66 tCO₂eq per tonne of product, while the average carbon intensity of BF-BOF production within the EU is approximately 1.9 tCO₂eq per tonne. Consequently, a large share of existing facilities would already qualify for the B class without implementing additional emissions reductions, limiting the effectiveness of the classification system as a decarbonisation incentive.
A similar concern was raised regarding wire rod (WR), a long steel product. The statement noted that the B performance class would encompass both imported natural gas-based DRI-EAF products and BF-BOF products, despite the fact that a substantial portion of European wire rod production is already carried out through electric arc furnace (EAF) technology, which supports circular and lower-carbon production pathways. The signatories argued that fossil fuel-based production routes should not qualify under either the A or B performance classes.
Regarding the methodology used to establish the thresholds under the Delegated Act, the organisations proposed narrowing the eligibility criteria for public procurement under the A and B performance classes. Their objective is to ensure that only genuinely low-carbon and fossil-free steel products are rewarded, thereby creating stronger incentives for investment in advanced decarbonisation technologies.
Specifically, they proposed that only the top 10% most sustainable steel products should qualify for the A and B classes, and that a threshold of 400 kgCO₂eq per tonne of crude steel should separate the A-B classes from Class C. They argued that the currently proposed 30% threshold would allow carbon-intensive products to be labelled as “green,” creating misleading market signals and weakening incentives for further emissions reductions.
The signatories concluded that these proposed adjustments would make the performance classes more meaningful and ambitious while accelerating decarbonisation investments in the European steel sector and supporting the achievement of the EU’s climate objectives.
The statement’s footnotes also noted that replacing iron ore with recycled steel can reduce emissions by approximately 1.67 tonnes of CO₂ per tonne of steel produced and can save up to 72% of the energy required for primary steel production.
Furthermore, referencing the JRC’s 2025 report titled “Analysis of the EU Steel Supply Chain: Current Trends and Circularity Opportunities,” the organisations underlined that greater utilisation of steel scrap represents a significant opportunity to strengthen circularity within the European steel industry.
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