Ref. Ares(2016)251711 - 18/01/2016
Date: 12 January 2016
Place: Brussels
Participants: Commissioner Arias Cañete with Mr Van Poelvoorde, President of Eurofer, and
other representatives of Eurofer, Cabinet members (CLB, YS), DG CLIMA
SUBJECT: market developments in the steel sector, expected impacts of the ETS review
proposal and suggestions for amendments
Mr Van Poelvoorde started by emphasising that Eurofer fully supports the fight against climate
change, the Paris Agreement and EU climate, policies including the 2030 targets and the need to
evolve towards a low-carbon economy by 2050.
He then presented the latest market developments in the steel sector, with particular emphasis on
the overcapacity in China and the ensuing increasing import, oversupply and decreasing steel prices
in Europe. Should China be granted Market Economy Status under the WTO, the situation would only
exacerbate.
The Commissioner reiterated the rationale underpinning the Commission proposal for the ETS
review, pointing to the detailed conclusions of the European Council of October 2014 as well as the
objective to minimise or if possible avoid the need to apply the cross-sectoral correction factor to the
free allocation for energy-intensive industry.
Eurofer explained the high costs impacts of the proposal for the sector based on a study by Ecofys
and underlined that a tiered approach for the carbon leakage list would better focus on the sectors
most in need of protection, that the benchmark should be based on real data rather than a standard
improvement rate and that best performers should receive all the allocation they need to cover their
emissions. They also stressed that border adjustments are not supported by Eurofer as the negative
consequences (retaliation, downstream cost increases) are estimated as too high. Finally, a more
harmonised approach to indirect costs would be welcomed.
The Commissioner suggested further discussions on the cost impacts and the benchmark should take
place at technical level. He reassured that during the legislative process in the European Parliament
and the Council, the Commission would act as an honest broker and assess any proposed
amendments on their merits, while stressing the need for any proposal to obtain the necessary
majorities in the institutions.