Europe’s proposed carbon border adjustment could hold the key to breakthrough on CO2 emissions reduction
March 12 2020 - 2:00AM
Europe’s proposed carbon border adjustment could hold the key to
breakthrough on CO2 emissions reduction
12 March 2020
ArcelorMittal today calls for member states and MEPs to support
the introduction of a carbon border adjustment (CBA), as part of
the European Commission’s €1 trillion Green Deal, aimed at making
the bloc carbon neutral by 2050.
In a manifesto published today, ‘Creating a low carbon world,
the case for a Carbon Border Adjustment’, ArcelorMittal sets out
its firm belief that a CBA should be one of the first Green Deal
measures adopted by the new European Commission, as it will help to
create the market conditions and protections needed for companies
to make investments and transition to carbon neutrality without
disruption.
Currently within the EU, energy-intensive industries including
steel producers, pay a carbon cost under the EU Emissions Trading
System (ETS). But this does not apply to steel producers from
markets outside the EU who can sell steel with comparable or often
significantly higher, carbon emissions, at a lower price. The
result is that steel production is moving to non-EU countries where
carbon emissions legislation is often less strict, undermining
efforts to combat climate change.
However, with a CBA, when steel comes into the EU, the carbon
costs that European producers pay would be added to the imported
steel, equalising the cost of carbon for every producer to create a
fair market and, crucially, encouraging investment in
lower-emissions steel production.
Geert Van Poelvoorde, CEO ArcelorMittal Europe – Flat Products
says: “The EU’s commitment to reduce its carbon emissions to
net-zero should be applauded and we hope that decision makers
across Europe will back the proposals as they really could hold the
key to unlocking solutions that could put a stop to carbon
emissions. The climate challenge is unprecedented, and bold action
is needed.”
ArcelorMittal believes that a CBA can be applied in various
ways, as long as it neutralizes the disparities in carbon costs
between domestic products and imports, and incentivizes the
transition to low carbon steel production. In the manifesto,
ArcelorMittal highlights how the best-designed carbon border
adjustment could work effectively:
Producers exporting to the EU should be charged the same
marginal carbon emissions cost as European producers pay under the
ETS. This should serve as a catalyst to other countries to
introduce their own carbon schemes and invest in technologies to
decarbonise.
The CBA should initially be applied to primary goods, rather
than end products like household appliances and everyday tools.
This is the most practical way to introduce the CBA.
To be effective, free allocation of ETS allowances, which are
gradually being phased out by the European Commission, should be
maintained in the first stage of the CBA, alongside compensation
for high energy costs as an indirect result of the ETS. This is
crucial to enabling European steel to stay competitive and ensure a
smooth transition without disruption.
He says: “There are of course challenges that will need to be
overcome. For example, some have argued that there is the risk of
contravening international trade rules. However, the establishment
of a border adjustment is compatible with international trade
rules, allowing members to adopt measures necessary for the
protection of the environment or relating to the conservation of
natural resources providing that such measures do not constitute
arbitrary discrimination between countries where the same
conditions prevail. But this will only work if the policies are
well-designed and drafted in the right way.”
He also says: “We know we need to invest more to decarbonise our
industry and we truly believe we can be a world leader in low
carbon steel. But in order to do so, we need to have a CBA to
create a landscape where others also contribute equally to a
carbon-neutral world. The time to do this is now, with the proceeds
allowing further investment in large-scale green technologies that
lead to a new era of low carbon emissions.”
For more information, to read the manifesto and view our short
animation on the CBA, see here:
https://corporate.arcelormittal.com/sustainability/climate-action-in-europe
ENDS
About ArcelorMittal
ArcelorMittal is the world's leading steel and mining company, with
a presence in 60 countries and primary steelmaking facilities in 18
countries. In 2019, ArcelorMittal had revenues of $70.6 billion and
crude steel production of 89.8 million metric tonnes, while iron
ore production reached 57.1 million metric tonnes. Our goal is to
help build a better world with smarter steels. Steels made using
innovative processes which use less energy, emit significantly less
carbon and reduce costs. Steels that are cleaner, stronger and
reusable. Steels for electric vehicles and renewable energy
infrastructure that will support societies as they transform
through this century. With steel at our core, our inventive people
and an entrepreneurial culture at heart, we will support the world
in making that change. This is what we believe it takes to be the
steel company of the future. ArcelorMittal is listed on the stock
exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg
(MT) and on the Spanish stock exchanges of Barcelona, Bilbao,
Madrid and Valencia (MTS). For more information about ArcelorMittal
please visit: http://corporate.arcelormittal.com/
Contact information – ArcelorMittal
Europe
communications Surinder.Sian@arcelormittal.com +44
203 214
2876 Sophie.Evans@arcelormittal.com +44
203 214 2882 |
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