40 industrial groups demand policy shift on EU emissions trading in open letter

The groups argue that high energy costs, regulation, and rising CO2 prices are undermining European competitiveness "in immer schnellerem Tempo." Europe is acting "praktisch im Alleingang" when it imposes rapidly rising CO2 costs on an industry "die ohnehin mit teurer Energie und Regulierung zu kämpfen habe." The preconditions for industrial transformation are also lacking: "Wichtige Voraussetzungen für eine wirtschaftliche Dekarbonisierung seien aber nach wie vor unzureichend entwickelt oder nicht in großem Maßstab verfügbar." Named among these are competitive electricity prices, affordable green hydrogen, carbon contracts for difference, CO2 capture and storage, as well as lead markets for low-emission steel.

The demands in detail

In the letter, the signatories warn specifically: "Wenn das bestehende System fortgesetzt werde, werde es zu einer Verlagerung von Produktion und Werksschließungen kommen." "Die Folgen – Arbeitsplatzverluste, rückläufige Investitionen und ein nachlassendes Wirtschaftswachstum – sind absehbar." They call for a freeze on ETS costs, the reinvestment of revenues in industrial decarbonization, and a "ausgewogener Ansatz für die Wettbewerbsfähigkeit im Import- und Exportbereich." In addition, "derzeit diskutierte Auflagen für die kostenlose Zuteilung von Zertifikaten … vermieden werden" should be avoided.

The EU Commission plans to present proposals for a fundamental overhaul of the system in July. Emissions trading is the EU's central climate protection instrument on the path to climate neutrality by 2050. Companies must hold certificates for every tonne of CO2 emitted; over the years, the number of available certificates declines – a mechanism designed to efficiently drive greater climate protection. Between 2005 and 2023, the EU ETS is said to have led to emission reductions of around 49 percent in the energy sector.

Pushback from the workforce

Running parallel to the letter from heavy industry is a wave of protests by IG Metall, which recently mobilized thousands of steelworkers at protests in Berlin and Völklingen. The union warned against reversing the transition to climate-neutral production. This endangers "Zehntausende Jobs." This puts the union in a tense relationship with parts of its own sector: while Thyssenkrupp and ArcelorMittal advocate a softening of emissions trading, other companies that have already invested in transforming their plants, such as Saarstahl, fear ending up as losers.

The companies' own data illustrate the scale: "Unter den derzeitigen Rahmenbedingungen des EU-ETS würden die Kosten für die Stahlproduktion in der EU bis Anfang der 2030er-Jahre voraussichtlich um rund 50 Prozent steigen." "Ohne Reformen sei mit einem Rückgang der stahlintensiven Produktionstätigkeit um 30 bis 40 Prozent zu rechnen. Das betreffe bis zu 5 Millionen Arbeitsplätze entlang der gesamten Wertschöpfungskette." The three steel companies voestalpine, ArcelorMittal Europe, and thyssenkrupp Steel reportedly account for about 60 percent of integrated steel production in Europe.

Are 50 percent additional costs looming?

In a joint press release, the three steel groups described the recent introduction of the CO2 border adjustment mechanism (CBAM) and the upcoming tariff quotas as "wichtige Schritte hin zu faireren Wettbewerbsbedingungen." They explicitly committed to reducing their CO2 emissions, but criticized the lack of economic viability of the process. "Das letzte erforderliche Puzzleteil, um sicherzustellen, dass Europa sowohl dekarbonisieren als auch eine starke industrielle Basis aufrechterhalten könne, sei nun die Reform des EU-ETS." The EU ETS reform must "weiteren Schaden für die industrielle Basis Europas vermeiden."

The debate comes at a time when Brussels wants to readjust the balancing act between climate protection and industrial competitiveness. The groups also accuse the system of no longer reflecting the reality of global markets. Customers are not willing to pay for low-carbon products, and there is a lack of functioning infrastructure for hydrogen and CO2. Whether the EU Commission will address the demands in July remains open – but the letter puts Brussels's leadership under immediate pressure just weeks before the announced reform package.