Four European Industrial Giants Demand Suspension of EU ETS

Four of Europe's largest steel and chemical companies have sent a letter to European Council President António Costa demanding an immediate suspension of the EU's Emissions Trading System (ETS). The companies – ArcelorMittal, ThyssenKrupp, Voestalpine and BASF – claim the ETS puts them under "strong pressure" and that the system "no longer reflects current global realities." Their combined market value exceeds €100 billion.

In the letter, obtained by POLITICO, the companies call for "immediate action to stop the escalation of costs under the ETS and prevent further damage to European industry." They criticize the EU for "unilaterally imposing rapidly rising CO2 costs on its industry, which already faces structural cost disadvantages such as higher energy prices and regulatory costs."

The ETS is one of the EU's most ambitious climate policy tools, gradually lowering emission caps for energy-intensive sectors. Introduced in 2005, it was widely seen as the most efficient market-based way to cut emissions. However, the companies note that other countries, including the US, have not followed suit, and the current ETS price stands at around €75 per tonne of CO2, one of the highest in the world.

The companies demand a full revision of the ETS. The European Commission is set to publish the results of its ETS review in mid-July. They also criticize the Carbon Border Adjustment Mechanism (CBAM), saying its scope is too limited.

The issue is contentious within the steel industry. Companies like Saar-Holding Stahl (SHS) and Salzgitter lobby against weakening the ETS, arguing that without a rising CO2 price, green steel production is not viable. Critics, however, say the steel and chemical industries have already been favored, especially in recent ETS benchmark setting.

According to Carbon Market Watch data, ArcelorMittal received free allowances worth over €3.8 billion in 2023, ThyssenKrupp €1.8 billion, and Voestalpine €795 million.