A new joint statement urges the EU to set binding targets for recycled steel use in cars, citing the climate benefits of secondary steel and the need to reduce demand for high-emission imports.
Free allocation has long been used to address carbon leakage under the EU ETS, but it has key limitations. It only covers emissions up to benchmark levels, fails to reward cleaner EU producers, and forfeits auction revenues that could support decarbonisation. It also creates perverse incentives by making high-emission goods artificially cheap.
Industrial heat electrification is a key strategy for decarbonising energy-intensive industries by replacing fossil-based heat. We welcome the European Commission’s initiative to launch an auction to electrify industrial heat, while emphasising the need for careful design to prevent unintended increases in emissions due to electricity grid dynamics.
Aluminium production remains challenging to decarbonise. This brief examines the limited potential of Carbon Capture and Utilisation (CCS/U) in the sector and explores alternative approaches that may offer more effective emissions reductions.