EU steelmakers concerned about direction of discussions on green steel labeling

Representatives of the European value chain in secondary steel production have expressed concern about the direction of current discussions on the methodology for labeling green steel and identifying leading markets in the EU. This is stated in their joint appeal to the European Commission.

The signatories are concerned about the possible application of the “sliding scale” concept without distinguishing between steel production technologies (oxygen converter and electric arc).

As noted, the “sliding scale” concepts were primarily developed for primary coal-based steel production.

“While these approaches may be appropriate to support the decarbonization of this technology, they do not make sense and will in fact be counterproductive if applied to the already highly decarbonized route of electric arc furnace steelmaking or to the markets to which such products are predominantly supplied,” the letter states.

The letter emphasizes that adjustments or technical solutions cannot remedy this inconsistency. The allegedly “voluntary” nature of the proposed labeling will also not be sufficient to mitigate the damage that its approval by the EC will cause.

The signatories note that the organizations developing this variable scale labeling (MEA, Climate Club, OECD) consulted almost exclusively with primary producers, without taking into account the characteristics of mature, market-oriented economies where electric arc furnace steel production is already well developed. The limited participation of secondary steel producers in these initiatives and standards makes them unrepresentative of the value chain in secondary steel production in the EU.

European steel producers and scrap collectors warn the EC against such an unbalanced and discriminatory policy and the consequences it will have for half of the EU steel industry and its value chain.

They call on the European Commission to recognize that universal labeling would be counterproductive, creating inconsistencies and distortive effects, such as the substitution of electric arc furnace (EAF) steel production in favor of imports with higher emissions.

“A more balanced and targeted approach, consistent with existing policy frameworks and instruments that already rely on carbon footprint methodologies linking circularity and decarbonization, will better stimulate demand for environmentally friendly materials,” the letter states.

European steel producers and scrap collectors are ready to contribute to this process. Among the signatories of the letter are Recycling Europe, Duferco, Beltrame Group, Celsa, Aperam, Tenaris, and others.

It should be noted that a “sliding scale” refers to approaches that take into account the variable amount of scrap used in production. The standard uses limits that are common to all steel producers.

As a reminder, ResponsibleSteel announced a partnership with the China Iron and Steel Association (CISA) and the European Low Emission Steel Standard (LESS). The parties will agree on global standards for green steel.