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Steel industry moulds EU carbon market to its advantage

Steel News - Published on Thu, 08 Nov 2018

Image Source: EurActiv
EURACTIV France reported that by authorising the steel industry to burn blast furnace gases until 2026, the European Commission has backtracked on its earlier position. In its last proposal on the allocation of CO2 allowances for industry after 2020, the European executive has proposed granting free allowances to blast furnaces which burn gases generated by the combustion of coal and coke, rather than using them.

As the document stated (page 24), emissions from flaring will have to be reduced as of 2026 when steel factories will have to produce carbon allowances to continue the practice. This is a decision that goes against the Paris Agreement and is the result of fierce lobbying by the steel sector with EU member states and the European Commission.

A source close to the discussions said that “It was initially a technical subject, it has become very political. Germany and Belgium mobilised and it was Juncker’s cabinet that ultimately decided in favour of industry.”

Having been adopted a year ago, not without difficulties, the reform of the European carbon market has borne fruit in terms of price rises. Having been at EUR 7 a tonne a year ago, CO2 is now processed at EUR 16 because the prospect of a significant reduction in the number of allowances in circulation has encouraged industry to buy them, which has in turn pushed up the prices.

The European Parliament and several member states, including France, have excluded new coal plants from future financing under the EU’s reformed carbon market. EURACTIV France reports.

The directive now has to be interpreted by delegated acts, which are drawn up by the European Commission and then submitted to the European Parliament and the European Council for approval.

The document organising how allowances are allocated does not contain any major surprises for the other sectors and the 11,000 industrial sites concerned, which might encourage the European Parliament to approve it. If it is voted against, all of the negotiating work would have to be started over.

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Posted By : Ratan Singh on Thu, 08 Nov 2018
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