Steel industry moulds EU carbon market to its advantage

(EurActiv, 5 Nov 2018) By authorising the steel industry to burn blast furnace gases until 2026, the European Commission has backtracked on its earlier position. EURACTIV France reports.

In its last proposal on the allocation of CO2 allowances for industry after 2020, the European executive has proposed granting free allowances to blast furnaces which burn gases generated by the combustion of coal and coke, rather than using them.

As the document stated (page 24), emissions from flaring will have to be reduced as of 2026 when steel factories will have to produce carbon allowances to continue the practice.

This is a decision that goes against the Paris Agreement and is the result of fierce lobbying by the steel sector with EU member states and the European Commission.

“It was initially a technical subject, it has become very political. Germany and Belgium mobilised and it was Juncker’s cabinet that ultimately decided in favour of industry,” said a source close to the discussions.

Having been adopted a year ago, not without difficulties, the reform of the European carbon market has borne fruit in terms of price rises. Having been at €7 a tonne a year ago, CO2 is now processed at €16 because the prospect of a significant reduction in the number of allowances in circulation has encouraged industry to buy them, which has in turn pushed up the prices.

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EurActiv, 5 Nov 2018: Steel industry moulds EU carbon market to its advantage