Europe’s top steelmakers warn ETS could cost 5 million jobs

EU Industry and Nations Push for ETS Reform Amid Job Fears

Three of Europe’s largest steelmakers issued a joint warning on Tuesday that the EU Emissions Trading System risks destroying the continent’s industrial base, as Portugal simultaneously called on Brussels to halt cuts to free carbon allowances ahead of a major policy review next month.

Steelmakers Sound the Alarm

ArcelorMittal, thyssenkrupp Steel, and voestalpine — together representing around 60% of Europe’s integrated steel production — published a joint statement on June 17 calling for urgent reform of the ETS. In an accompanying article in the Financial Times, ArcelorMittal executive chairman Lakshmi Mittal warned that under the current framework, EU steel production costs are expected to increase by around 50% by the early 2030s.globenewswire

The companies estimate that without reform, Europe could face a 30–40% decline in steel-intensive manufacturing activity, putting up to 5 million jobs at risk across the value chain. They called for a temporary pause in ETS cost escalation until key enablers of decarbonization — including competitive electricity prices, affordable green hydrogen, and carbon capture infrastructure — are in place.marketchameleon

“The ETS needs a reality check,” said Marie Jaroni, CEO of thyssenkrupp Steel. “We need a cost pause in the ETS to safeguard the transformation and ensure that ‘first movers’ like us are not put at a disadvantage.”globenewswire

Portugal Joins the Chorus

Portugal has separately urged the European Commission to pause cuts to free carbon allowances, proposing a temporary freeze on previous allocation volumes until the wider ETS review due on July 15 is completed. The country expressed particular concern for energy-intensive sectors including ceramics, glass, and cement, warning that the reductions could damage competitiveness and slow decarbonization efforts.facebook

Portugal’s intervention adds to mounting pressure from member states. In March, ten EU governments called on the Commission to maintain free carbon permits for industry, and EU leaders formally requested that the ETS review be delivered by July 2026 to address price volatility and its impact on electricity costs.reuters

Political Momentum for Change

The European People’s Party, the largest political group in the European Parliament, has also been exploring carbon market changes to protect industrial competitiveness and curb excessive price swings. According to Reuters, the Commission’s forthcoming proposal is expected to extend industries’ free emissions allowances in exchange for commitments to invest in local decarbonization.reuters

The formal ETS revision proposal is expected on July 15, with negotiations between Parliament and the Council anticipated to run through 2026 and into 2027. Herbert Eibensteiner, CEO of voestalpine, framed the stakes plainly: “The phase-out of free allocation is already diverting financial resources needed for the decisive phase of transformation.”opis