The chief executive of German steelmaker Salzgitter AG, Gunnar Groebler, has criticized the European Commission's proposal to reform the EU's flagship emissions trading system (ETS).
Writing on the LinkedIn platform on Friday, the same day the EU proposal to relax the ETS rules was unveiled, Groebler said the plan could undermine climate investments and penalize companies that have already begun the transition.
Several industry sectors and EU member states had lobbied for changes to the ETS, warning of further factory closures and production relocations if changes weren't made.
Groebler wrote in German: "An industrial policy that retroactively changes the rules of the game must not leave pioneering companies out in the cold."
Salzgitter has already invested billions of euros in its shift to green steel, based on expectations of a stable and reliable regulatory framework, Groebler said. He warned that easing ETS rules could undermine those investments.
The Lower Saxony-based steelmaker began converting its Salzgitter plant at the end of 2023.
The German federal government and the state of Lower Saxony are supporting the project with about €1.3 billion ($1.5 billion).
The first green steel facility is set to start production in 2027. Instead of using a coal-fired blast furnace, the new plant is set to initially run on natural gas before switching to green hydrogen.
Groebler warned that companies that invested under existing EU rules should not be disadvantaged by later changes.
"The relief measures planned for the period after 2030 could already today make it harder to ensure the economic viability and financial feasibility of decarbonization projects in Europe," Groebler warned.
"Innovative, low-carbon business models risk losing their appeal as a result - with adverse consequences for investment readiness and Europe's industrial resilience," he said.
Under the EU climate scheme, companies receive certificates for the emission of greenhouse gases such as CO2 and can trade them or purchase additional ones as needed. This creates a price for every metric ton of CO2 emitted.
The commission is proposing that the total number of available permits for the emission of climate-damaging gases such as carbon dioxide (CO2) should decrease more slowly than before. In addition, more free certificates are to be made available in certain sectors.
The proposal needs to be approved by the European Parliament and member states to take effect.
