Comments on consultation concerning the EU's 2030 targets.
Jernkontoret d-nr: 20/20.
Jernkontoret, the Swedish steel producers' association, welcomes the opportunity to provide our view on the 2030 climate target plan.
Jernkontoret also support the contribution from Eurofer.
Swedish steel industry has developed a climate roadmap describing technical possibilities and needed supportive conditions to reach net zero GHG emission 2045, being the Swedish climate target. The major solution to decrease GHG emissions in steel industry, and other sectors, is electrification. Access to fossil free electricity to competitive cost is thus an important enabler. The second main enabler is long term support for research and development. Emission elimination need development and deployment of new technologies.
The long-term target, climate neutrality 2050, is most important and should be the focus for energy and climate policy development. Interim targets, like the 2030 target, should be thoroughly prepared and need to be reachable at the basis of cost efficiency.
The further we get in decreasing and eliminating emissions the more targeted solutions is needed. The low hanging fruits are picked, and more complicated and expensive solutions need to be developed and implemented. Thus, different sectors need different support and incentives. For this reason, we do not support the extension of EU-ETS to other sectors such as transport. That would only increase the carbon price and the costs for industry exposed to international competition.
Another aspect is that the decrease in emission for different sectors will have different paths. For industries that need new breakthrough technologies there will not be a linear trajectory. New technology requires sufficient time to be developed, tested and implemented. After that, an accelerated pathway could be achieved, most likely post 2030.
It is problematic if targets directly affecting legislation directed towards companies, ie ETS, is changed during the ongoing trading period. This would create great uncertainty due to the risk of increased costs for emission allowances and disincentivize investments in European production sites. Increased costs may also slow down the development of new technologies. We would like to emphasize the importance the keep and strengthen the carbon leakage provisions in connection to ETS. The free allocation is crucial to maintain a competitive industry in Europe and the compensation for indirect costs due to higher electricity price should be compulsory to all member states.
An increased 2030 target should therefore be directed towards the non-ETS sectors and maintaining the current level of ambition in the ETS. Focusing the increased efforts towards the member states through the Effort sharing regulation would enable member states to choose the appropriate measures depending on national conditions.
We welcome the extensive analysis that the commission will carry out. For process industries it is essential that the impact assessment includes a forward-looking approach including the analysis of carbon leakage measures and the consequences of the current COVID-19 crisis. An economic downturn may well delay investments and implementation of techniques that could lead to decreased emissions. Long-term profitability and sustainable growth are prerequisites to enable climate ambitions.