Development of the iron and steelmaking sector under the EU ETS : overview and country level analysis from 2005 to 2019

Iron and steelmaking is the industrial sector with the highest absolute CO2 emissions covered by the European Union Emissions Trading System (EU ETS). This report aims to describe key developments of the sector in the period from 2005 to 2019. It identifies key drivers behind the trends in emissions, production levels, investments, and the market environment on the country and installation level. By providing key information from past developments, it sets a solid basis for future projections and the design of climate policy. The report begins by providing an overview of the EU-28 level, describing emissions sources, production routes as well as trends in investments and the regulatory and market environment. The remainder provides information on the iron and steelmaking sector for eight selected European countries: Germany, Italy, France, Poland, Austria, the United Kingdom, the Netherlands and the Czech Republic in the form of brief fact sheets. Since the introduction of the EU ETS in 2005, total emissions reported in the European Union Transaction Log (EUTL) have declined from around 240 Mt CO2 to around 200 Mt CO2 in 2019. The decline can mostly be attributed to a reduction in total production volumes (from 190 Mt crude steel in 2005 to 160 Mt crude steel in 2019), with no significant change in shares of different production routes, nor significant efficiency gains on the respective routes. EU-28 steel consumption is predominantly balanced by domestic supply. In 2019, almost 10 % of net demand was covered by imports with the largest trade partners being Russia and Ukraine, albeit China is the world dominate steel producer with 50 % of steelmaking capacity. On the facility level, no new integrated steelworks have opened in the EU-28 since 2005; in fact most sites look back on a long history of steelmaking. In the aftermath of the economic crisis of 2008-2009 several furnaces were not relined after reaching the end of the lifetime (in particular in the United Kingdom, France, Poland and the Czech Republic). Few new electric arc furnaces were added at existing integrated sites, e.g. in the United Kingdom and Italy.