The European Union’s Fit for 55 climate change package must not only revise carbon emission targets but also strengthen carbon leakage protection, according to the European Steel Association (Eurofer).
The new package slated to be presented on Jul 14 includes several changes in the EU emissions trading system (ETS), a carbon border adjustment mechanism (CBAM), and a revised energy tax directive. However, according to Eurofer, the Union can achieve its new targets only if it can find appropriate markets for its proposed ‘green’ steel through proper resource direction. Industries that transition to sustainable steel must implement effective measures to curb carbon leakage and have access to affordable low carbon energy sources and raw materials.
The association has proposed that the EU weighs the consequences of reducing allowance allocation below benchmark levels for industries to avoid carbon leakage. It has also urged the EU to consider compensating producers for indirect CO2 only after the first phase of carbon-neutral projects has been commissioned.