The proposed benchmarks for industrial greenhouse gas emissions are no expected to be confirmed by the European parliament later this year. Eurofer still believes that they have been set too low and estimate that the European steel industry could face additional costs of some €1.5-3bn per year. According to SBB‘s broad estimates this could add some 2.5-5% to average European integrated steelmaking costs. However, the most efficient plant in Europe is more likely to see an increase of under 0.5%.
SBB 20 December 2010 The greenhouse gas (GHG) benchmarks for the European steel sector were approved last week after the German environment ministry abandoned its opposition, Steel Business Briefing understands.
The German environment ministry had opposed the benchmarks, presumably as they were too low, and had the power of veto. However, it changed its position to vote in favour at the last minute. The ministry simply “didn’t feel much support” for its view from other governments and decided to compromise, it tells SBB. It described the final decision as well balanced.
The benchmarks will be used to determine the volume of free emission allowances given to the steel industry in phase III (2013-2020) of the European Emissions Trading System (ETS). Polluters which have insufficient allocations to cover their emissions will have to buy in more permits.
Indeed, the agreed benchmarks are still ‘far below where they need to be’, Eurofer’s Axel Eggert tells SBB. They supposedly represent the average of the 10% most efficient plants in terms of GHG emissions, but the benchmark for blast furnaces is still some 7% below the most efficient in Europe, Eurofer suggests.
The result will lead to significant added costs for steel companies in Europe “compared to steel companies that produce steel in regions which do not have similar CO2 costs’, warns ArcelorMittal in a statement sent to SBB.