Steelmakers warn ETS could crush Europe’s industrial base
LUXEMBOURG — The math is brutal. By the early 2030s, producing a ton of steel in the European Union will cost roughly 50% more than it does today. That is not a prediction from a think tank.
It is the calculation three of Europe’s biggest steelmakers have made, based on the current trajectory of the EU Emissions Trading System. ArcelorMittal Europe, thyssenkrupp Steel, and voestalpine issued a joint statement today calling for urgent, pragmatic reform of the ETS.
Together they represent about 60% of Europe’s integrated steel production. They have all committed to decarbonising. But they say the policy framework is actively working against them.
The ETS has been a success story in the power sector. Between 2005 and 2023, it drove emissions down by about 49% there.
But for energy-intensive industries like steel, it is not delivering a viable pathway. The system was designed for a different kind of beast. Steelmaking is not like running a gas plant.
You cannot simply switch fuels. The process itself emits CO2. And the alternatives — green hydrogen, carbon capture and storage, electric arc furnaces fed by scrap — require massive capital investment and supporting infrastructure that barely exists at scale.
Those are exactly the enablers the three companies say are missing. Competitive electricity prices.
Affordable green hydrogen. Carbon Contracts for Difference. Carbon capture and storage.
Lead markets for low-carbon steel. None of these are sufficiently developed or available at scale, according to the statement.
The ETS pushes costs up without providing the tools to get costs down. Then there is the trade problem. Steel-intensive imports into the EU face no equivalent carbon cost.
EU steel exports receive no rebate to recover the carbon cost they already paid. That is not a level playing field. It is a tilted one that punishes domestic producers.
The companies’ position was laid out in a recent Financial Times article by ArcelorMittal executive chairman Lakshmi Mittal. He articulated the shared view that the ETS needs to be reconsidered to safeguard European steelmaking and all the industries it serves.
Steel is not just steel. It is cars, buildings, bridges, wind turbines, pipelines. Lose the steel base and you lose a lot more.
This is not a sudden complaint. The three companies have been warning for years that the transition must be enabled, not inhibited.
The joint statement is a coordinated push, timed to influence the ongoing policy debate in Brussels. They are not asking for a free pass on emissions. They are asking for a framework that makes decarbonisation economically possible rather than economically suicidal.
The stakes are straightforward. If the cost of producing steel in the EU rises 50% by the early 2030s, and imports face no equivalent cost, production will move. Jobs will move.
Emissions will move — to places with weaker standards. The climate gains nothing.
Europe loses its industrial capacity. That is the core of the argument. The ETS, as it stands, risks destroying Europe’s industrial base.
The three steelmakers are not saying stop decarbonising. They are saying do it right.
Do it with a policy that gives them the tools to compete while they transform. Otherwise, the only thing the ETS will reduce is European steel production.
