EU steel lobby seeks protection from China ‘carbon dumping’

Industry cites job losses in clash with green campaigners over EU carbon market reforms

(Pic: Pixabay)

(Pic: Pixabay)

By Megan Darby

Seven thousand EU steelworkers lost their jobs in the past six months, trade association Eurofer estimates.

It lays the blame with China, which is depressing prices worldwide with excess production. Thousands of protestors descended on Brussels earlier in the week to warn against liberalising trade with Beijing.

In a bid to halt the decline, Eurofer is lobbying hard against any regulatory cost imposed on the sector – notably carbon pricing.

“China is offloading on the global market planned and subsidised overcapacity,” the group’s Axel Eggert told European lawmakers on Thursday. “China massively dumps on the market… that is also CO2 dumping.”

He was giving evidence to the European Parliament’s environment committee over the latest attempts to prop up the bloc’s flagging emissions trading scheme (ETS).

In what has become a familiar battleground, green campaigners countered industry appeals for special treatment with calls to raise ambition.

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After 195 countries agreed in Paris to curb their greenhouse gas emissions, they argued EU pollution limits should be tightened, not watered down.

“We shouldn’t be scared of the carbon leakage monster,” said Genevieve Pons Deladriere, WWF, referring to the spectre of industry emigrating to dodge carbon costs.

“So far, the ETS is not meeting its objectives: the carbon price is too low, there is no incentive to reduce pollution and polluters aren’t paying.”

Bas Eickhout, Green lawmaker from the Netherlands, agreed that it was hard to square industry “scare stories” with the market situation.

The carbon price is languishing at €5 a tonne after “black January” – far from the €30 level envisaged at the policy’s inception.

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Leaders of 23 major EU companies yesterday called for reforms to boost that price and spur low carbon investment.

A legislative proposal published by the European Commission last July includes measures that should exert upward pressure on prices. It reduces the overall cap on emissions under the scheme 2.2% a year from 2021, up from 1.74%.

But in a concession to industry, around 6.3 billion pollution permits will be handed out for free next decade.

High emitting companies are already sitting on a pile of excess allowances, according to campaigning think tank Sandbag.

The bloc’s greenhouse gas emissions dropped 23% below 1990 levels in 2014, beating its 2020 target six years early.

“After the optimism of Paris, it would be deeply cynical for Europe to continue to bank that overachievement,” said Damien Morris, analyst at Sandbag.

Instead, Brussels should permanently cancel surplus permits, speed up the annual decrease in allocations and set a floor price, he suggested.

Read more on: Carbon markets | China | EU