News Global Market decarbonization 864 27 November 2024
Energy-intensive sectors face challenges both from their own transformation and from customers
The challenges faced by energy-intensive industries require political steps to enable sustainable, market-oriented business models. This was stated in an address by Herbert Eibensteiner, CEO of the Austrian steel company voestalpine.
He noted that these sectors are now facing pressure from both the need for their own transformation and from their customers.
According to the CEO of voestalpine, the company has already embarked on the path of climate-neutral steel production. The first large-scale investments amount to billions of euros and are already being implemented – voestalpine greentec steel is the largest industrial climate protection program in Austria. The company is consistently expanding this new product portfolio.
At the same time, the policy framework that would allow the company to achieve global and European competitiveness still lags behind business needs.
The CEO of voestalpine draws attention to the continuous tightening of emission targets, which is out of step with reality and threatens the survival of energy-intensive industries and thus value chains. This starts with excessive regulation.
In the last legislative period alone, about 13,000 regulations were adopted in the EU, and more than 900 in Austria. These regulations include globally uncompetitive labor costs, and energy issues, as price and supply risks for green electricity and renewable gases on an industrial scale remain unregulated.
They also reflect Austria’s notorious gold-plating of EU goals and norms, as well as political struggles in the country that have prevented the establishment of mechanisms to support the transition and overcome competitive disadvantages compared to other countries in the bloc.
The current governmental negotiations and the inauguration of the new EC, according to the CEO of voestalpine, are taking place at a critical time for the energy-intensive industry. In his opinion, the announced Clean Industry Agreement should bridge the gap between climate goals and industrial competitiveness. In addition, the new EC should take into account the proposals set out in the Draghi report. In particular, this concerns a critical review of the phasing out of free ETS allowances during the implementation of the CBAM.
The priority measures proposed by Herbert Eibensteiner include:
- reducing non-wage labor costs;
- Ensuring the competitiveness of Austrian companies in the EU (restoration of electricity price compensation, suspension of the renewable energy subsidy surcharge and increase in network charges, appeal against the German gas storage tax)
- avoidance of new, excessive intensification targets for 2040, critical review of the CBAM,
- reducing bureaucracy,
- recognizing the importance of Austrian industry by creating a special ministry with appropriate powers,
- ensuring Austria’s active and constructive role at the EU level in the Council and the European Parliament.
As GMK Center reported earlier, EUROFER warns that a robust action plan for steel industry under the EU Clean Industry Agreement is urgent, as a delay would jeopardize the value chains in the bloc.