Eurofer expects an interim low-emission steel trading agreement to be announced at the 20 October EU-US Summit in Washington and says this must pave the way for a strong, international binding Global Arrangement on Sustainable Steel and Aluminium (GASSA).

The meeting should outline “an ambitious framework that will provide clear guidance and include the substantive elements of [GASSA]", the European steelmakers’ association says. “The details will need to be worked out in the coming months.”

“The GASSA should be an international agreement binding transatlantic partners with a common vision while also remaining open to other like-minded countries with closely aligned trade policies and measures. Individual actions taken in isolation cannot have a global impact on excess capacity and decarbonisation,” Eurofer director general Axel Eggert notes in a statement sent to Kallanish.

The OECD recently noted that global excess steelmaking capacity has exceeded 600 million tonnes/year, with the majority found in Asia, the Middle East and North Africa.

Some 150m t/y of new capacity additions scheduled by 2026 are meanwhile primarily carbon-intensive blast furnaces. “This new capacity alone, locking-in CO2 emissions for decades, will result in more CO2 emissions than the entire EU steel industry combined, erasing all of the EU steel industry’s emission reduction efforts up to 2050 in just three years,” Eggert says.

“The EU steel industry is currently in the most vulnerable situation, having lost around 30 million tonnes of sales in the EU and foreign markets over the past decade. We need an effective GSSA to transition towards carbon neutrality and support the EU’s strategic autonomy objective in a sustainable manner,” he continues.

“Traditional trade instruments are fit for purpose, but their purpose is not to address global non-market excess capacity, while the Carbon Border Adjustment Mechanism (CBMA) has still to prove its effectiveness to level the playing field,” Eggert concludes.