24 June 2015
Mr. Jean-Claude Juncker
President
European Commission
Rue de la Loi, 200
B-1049 Bruxelles/Brussel
Letter by 60 CEOs of the European steel industry
An effective EU ETS that delivers both CO2 reductions and a competitive industry
Dear President,
The European steel industry is the basis of many European industrial value chains,
supporting millions of European jobs directly and indirectly.
We share the EU’s ambition to effectively combat climate change while at the same time
delivering on its objectives for jobs, growth and competitiveness. We welcome your
commitment to bring back the industry’s share in the EU’s GDP to 20%.
However, we are deeply concerned that the Commission proposal on the review of the
EU ETS may work against this ambition and will not deliver the necessary safeguards for
our sector against carbon and investment leakage.
It has been repeatedly established that the EU steel industry is at a very high risk
of carbon leakage. The notion that our industry could unilaterally pass on CO2
costs resulting from the EU ETS is in harsh contradiction with reality. The European
steel sector is subject to fierce global competition and continues to suffer from the
impacts of the recent economic crisis. Steel demand levels were in 2014 still 28% below
pre crisis levels and 20% of EU steel making jobs have been lost. Global steel
overcapacity, notably in China, along with Europe’s excessively liberal trade policies
mean that each steel order is highly contested. In this context the ability of European
steel makers to pass on significant regionally specific policy costs is virtually nil.
What we ask from the Commission is to base legislation on realistic impact assessments
and a well-grounded understanding of the challenges facing our sector. If targets are not
achievable for the steel industry and safeguard measures are not sufficient, investment in
the EU will be further discouraged. An EU ETS review that would lead to a structural
competitive
disadvantage
towards
third
countries,
would
be
dangerously
counterproductive – fundamentally undermining the economic sustainability of jobs and
growth in Europe whilst doing little if anything to achieve global environmental goals.
We therefore urgently ask the Commission to put forward a reform proposal with
provisions ensuring that the EU ETS will not lead to economic damage to Europe’s
steel makers based on the level of best performers, until a comprehensive global
agreement on climate change restores a level playing field:
100% benchmark based free allocation at the level of the 10% most efficient
installations, without correction factor;
Full off-setting of the indirect costs (CO2 cost-pass through in electricity prices) at
the level of the most efficient installations, in all member states;
Technically and economically achievable benchmarks (taking all the CO2 in waste
gases into consideration) as the current benchmarks are practically unreachable;
Allocation closely aligned with real/recent production levels with a realistic
reference period (year n-2) in order to re-establish the credibility of the system.
These pillars deliver not just for industry but for environment – a clear carbon price signal
remains beyond best performers to incentivise improvement and a closer allocation to
production levels reduces the risks of swings in supply and demand. They are fully in line
with the European Council Conclusions of 24 October 2014.
We are concerned about the apparent discussions within the Commission
seemingly interpreting the European Council Conclusions as suggesting a
decreasing amount of free allocation for carbon leakage sectors. Such a notion
flies completely in the face of the fundamental principles of safeguarding
competitiveness and providing a stable basis for jobs, investment and growth. It is
against the wording, sequence and logic of the Conclusions and against the
interpretation by lawyers.
Steel is a vital part of the solution to climate change challenges and the European steel
sector is at the forefront of change. We are delivering our share in the efforts to avoid
dangerous climate change. We reduced CO2 emissions of steel by 50% since the 1970s
but reach now technological limits. We will however strive to exploit any additional
potential for further CO2 emission reductions in EU steelmaking which is 10% to 15% at
best by 2050 compared to 2010 as described in the Steel Roadmap for a Low Carbon
Europe. We will continue to work on breakthrough technologies. Additionally, innovative
steel applications have already saved huge amounts of CO2 emissions in sectors such as
transport, energy production and buildings. They have the potential to save more than
450 million tonnes of CO2 per year by 2030. Its unique properties and applications make
steel one of the main pillars of a circular economy.
For this, we need a favourable business environment in the EU with achievable targets
and a global level playing field for our industry.
We trust in your thorough consideration of the above,
Copy: College of Commissioners
CEO’s of the European Steel Industry
Aditya Mittal
Andreas J. Goss
Karl Köhler
CEO
CEO
CEO & Managing Director
ArcelorMittal Europe
ThyssenKrupp Steel Europe AG
Tata Steel, Europe
Heinz Jörg Fuhrmann
Martin Lindqvist
Francesc Rubiralta Rubio
CEO
President & CEO
Chairman & CEO
Salzgitter AG
SSAB
Celsa Group
Cesare Riva
Herbert Eibensteiner
President
Head of the Steel Division and Member
Antonio Gozzi
Riva Forni Elettrici
of the Management Board
President
Voestalpine AG
Federacciai
Karlheinz Blessing
Mika Seitovirta
Scott D. Buckiso
CEO
President & CEO
President
AG der Dillinger Hüttenwerke
Outokumpu
U.S. Steel Kosice, s.r.o.
2
Timoteo Di Maulo
Horacio Malfatto
Bo-Erik Pers
CEO
CEO
President
Aperam
NLMK Europe
Jernkontoret
Hans Jürgen Kerkhoff
José Enrique Freire Arteta
Jan Czudek
President
President
CEO
Wirtschaftsvereinigung Stahl
Megasa - Siderurgia Nacional
Třinecké Železárny, a.s.
Bernardo Velázquez Herreros
Piero Gnudi
Gonzalo Urquijo
CEO
Extraordinary Commissioner
President
Acerinox, S.A.
ILVA SpA
UNESID
Fabio Baldrighi
Karlheinz Blessing
Peter van Buren
CEO
CEO
CEO
Acciaieria Arvedi SpA
Saarstahl AG
FNsteel bv
Stefan Dzienniak
Patrick Lamarque d’Arrouzat
Anton Chernykh
President of the Board
CEO
CEO
Polish Steel Association
Ugitech
SIJ Slovenian Steel Group
Oliver Bell
Jürgen Grossmann
Dmitrij Scuka
CEO
CEO
CEO & Chairman of Board
Deutsche Edelstahlwerke GmbH
Georgsmarienhütte Holding GmbH
Vítkovice Steel, a.s.
Jerzy Kozicz
Heikki Nyholm
Hans Lammert
CEO
President
Managing Director
CMC Poland
Ovako Steel Imatra Oy
Edelstahl-Vereinigung E.V.
Anatoli Fediaiev
Markus Ritter
Nikolaos Mariou
President of the BoD
Managing Director
General Manager
ISD Huta Czestochowa Sp. z o.o.(Ltd)
Marienhütte Stahl- und Walzwerk GmbH
Sidenor S.A.
Max Aicher
Alexandros Tiktopoulos
Rolf Wendler
President & CEO
President
Head of Sales & Logistics
Lech-Stahlwerke GmbH
Hellenic Steelmakers Union
Stahlwerk Thüringen GmbH
Lucia Morselli
Sergiy Pronin
Jaroslav Raab
CEO
Director for Economic & Business Dev.
Managing Director
Acciai Speciali Terni SpA
Vorskla Steel Denmark A/S
Hutnictvi Zeleza
Filippo Gottardis
Gareth Stace
Sergio Tosato
International Sales Director
Director
Vice-President & Managing Director
Officine Tecnosider
UK Steel
TenarisDalmine
Göran Ek
Robert Joos
Marjan Mačkošek
Managing Director
Director General
Managing Director
Fagersta Stainless AB
Groupement de la Sidérurgie asbl
Štore Steel
Pablo Battistini
Politimi Paunova
Roman Stiftner
Managing Director
Executive Director
Director
Roddacciai SpA
Bulgarian Association of the Metallurgical
Fachverband der Bergwerke und Eisen
Industry
erzeugenden Industrie
Kimmo Järvinen
Nikolaos Evangeliou
George Skindilias
Managing Director
General Manager
Vice-President & Managing Director
Metallinjalostajat
Stomana SA
Halyvourgiki Inc.
Bernard Bertier
Michel Hamy
Bernard Creton
Secrétaire Général
Director General
Délégué Général
SPAS
Badische Stahlwerke GmbH
Fédération Française de l’Acier
3
Carlos Alvarez
Roberto Marzorati
Vassilis Goumas
Commercial Director and Member of the
Vice-President
General Manager
Board
Cogne Acciai Special SpA
Hellenic Halyvourgia
Aceros Inoxidables Olarra SA
Robrecht Himpe
President
The European Steel Association
4