European Industry Demands Radical Shift in EU Climate Policy

More than three dozen major industrial companies operating in Europe have called on EU leaders to fundamentally change the bloc’s climate policy, warning that rising carbon costs threaten the competitiveness and future of energy-intensive industries.

In a letter to senior EU officials, companies including BASF, BP, Thyssenkrupp and ArcelorMittal argue that the EU Emissions Trading System (ETS) no longer reflects global realities. An emissions allowance costs around 10 euros in China, compared with roughly 80 euros in the EU.

The companies point to job cuts, plant closures and low capacity utilization. They also argue that the conditions for a successful industrial transition are not yet in place because infrastructure for electricity, hydrogen, carbon transport and storage remains inadequate.

Major steelmakers are also calling for reform of the emissions trading system. ArcelorMittal Executive Chairman Lakshmi Mittal has proposed freezing the ETS at its current level until the conditions for economically viable decarbonization and the preservation of global competitiveness are in place.

The European Commission is preparing further changes to the system. While industry groups argue that the current rules are damaging competitiveness, scientific advisers say a robust emissions trading system is needed to secure Europe’s long-term competitiveness.

(Handelsblatt, bak)