The “Fit for 55” package announced by the European Commission to achieve the goals of the Green Deal fails to set the right course for a climate-neutral steel industry, German mills find.

On the contrary, the plans for emissions trading increase the risk of international competitive disadvantages and thus carbon leakage, German steel federation WV Stahl says in a statement seen by Kallanish.

"The goals of the Green Deal can only be achieved with a strong industry. As it is now, the “Fit for 55” package does not take into account the requirements for transformation in the steel industry,” says WV Stahl president Jürgen Kerkhoff. The package “lacks sustainable support for the necessary investments in low-CO2 and also neutral processes in the long term.”

By converting to scrap-based electric steel production, the steel industry can make a major contribution to achieving the 2030 climate target and produce in a climate-neutral way in the long term, he explains. However, in the current proposal, the package “jeopardises these ambitions and must therefore be urgently revised in the further decision-making process", Kerkhoff points out.

The steel industry is particularly critical of the fact that the free allocation of certificates in EU emissions trading is to be massively reduced. In sectors like steel, it is to be gradually halved by 2030 and completely abolished by 2035, to be replaced by a CO2 limit compensation. However, a climate tariff alone cannot prevent steel from being produced in other regions of the world with lower climate protection requirements in the future, Kerkhoff warns.

"Border adjustment is still untested and involves considerable risks. Foreign competitors could find ways to circumvent the tariff,” he concludes.