Carbon Market Watch added its voice to a joint letter calling on policymakers to revise the draft delegated act for the Free Allocation Regulation (FAR) so that it can be an effective tool to decarbonise the steel industry.

Despite the European institutions stating clear positions that free allocation of emission allowances should be “independent of the feedstock or the type of production process” this text is missing from the FAR revision.

To align the FAR review with EU climate and circularity goals and to maintain consistency with the ETS Directive text, the EC must adopt a methodology for free allocation that is independent of feedstocks and that shifts from a process-based to a product-based approach (treating the emissions of all steel producers equally).

Steelmaking represents the most polluting industrial sector in the EU. Delaying the transition to net-zero steelmaking in anticipation of a fully effective carbon pricing mechanism will prove too late.

We urge the EP & Council to uphold the ambition to decarbonise the steel industry.