Steel and chemicals giants demand freeze to EU’s flagship climate policy

illuminem summarises for you the essential news of the day, reviewed by our editorial team. Read the full piece on POLITICO or enjoy below:

🗞️ Driving the news: Four major European industrial giants, including ArcelorMittal, ThyssenKrupp, Voestalpine, and BASF, are calling for an immediate freeze of the EU Emissions Trading System (ETS), arguing that rising carbon costs are threatening the competitiveness of Europe’s steel and chemicals sectors

🔭 The context: The EU ETS is the bloc’s flagship carbon pricing mechanism, steadily increasing the cost of CO₂ emissions for heavy industry in order to drive decarbonization
• However, energy-intensive sectors argue that Europe is imposing stricter climate costs than global competitors, creating risks of carbon leakage, industrial relocation, and job losses
The system currently prices carbon at around €75 per ton of CO₂

🌍 Why it matters for the planet: The ETS is one of the EU’s most powerful tools for reducing industrial emissions
• Weakening or freezing it could slow down decarbonization in some of Europe’s highest-emitting sectors, but maintaining it without global alignment risks accelerating industrial offshoring rather than real emissions reductions
• The outcome will directly influence Europe’s ability to decarbonize heavy industry while preserving competitiveness

⏭️ What’s next: The European Commission is expected to publish its ETS review in mid-July, which could become a decisive moment for the future trajectory of EU carbon pricing
• Policymakers will face mounting pressure from industry to introduce reforms, while climate advocates push to preserve or tighten the system

💬 One quote: “Immediate policy correction is required if their sectors are going to survive.” – Steel and chemicals companies in a letter to EU leaders, as reported by POLITICO

📈 One stat: ArcelorMittal received over €3.8 billion in free carbon allowances in 2023, highlighting the scale of financial support already embedded in the ETS system for heavy industry.

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