Outokumpu calls for robust carbon pricing following the European Commission’s proposal on the EU ETS review

Outokumpu calls for robust carbon pricing following the European Commission’s proposal on the EU ETS review

Outokumpu welcomes the European Commission's proposal for the review of the EU Emissions Trading System (EU ETS) for the 2031–2040 period. The proposal, published on July 17, confirms that the EU ETS will remain the European Union's primary instrument for reducing industrial emissions and supports the transition to a competitive, low-carbon economy.

The Commission's proposal maintains the EU ETS as the core mechanism to price carbon emissions and drive investments in cleaner technologies. While the proposal introduces adjustments to elements such as the trajectory of free emission allowances and the Linear Reduction Factor (LRF), Outokumpu highlights it is essential to preserve a strong and predictable carbon price signal to reward the early investments in decarbonization. Outokumpu does not support the proposal to delay the agreed phase-out of free emission allowances, as this would weaken incentives for industrial decarbonization, undermine the effectiveness of the Carbon Border Adjustment Mechanism (CBAM) and send the wrong signal to companies that have already invested in reducing emissions. Outokumpu supports aligning the LRF with the EU’s 2040 climate targets, but adjustments to the 4.4% annual reduction must be kept to a minimum, not to weaken the EU’s overall climate leadership and ambition.

"As Europe's leading producer of low-emission stainless steel, Outokumpu has consistently advocated for a strong and predictable carbon pricing framework that rewards investments in industrial decarbonization while ensuring a level playing field for low-carbon production. Companies invest when they have long-term policy certainty, and Europe must continue to provide that certainty. Weakening the carbon price would send the wrong signal to industries and would reduce incentive to invest in decarbonization”, says Heidi Peltonen, Vice President, Sustainability at Outokumpu.

Outokumpu believes that a strong EU ETS combined with a robust and fully implemented Carbon Border Adjustment Mechanism (CBAM) remains essential to prevent carbon leakage and strengthen Europe's industrial competitiveness. As free emission allowances are gradually phased out, effective CBAM will become increasingly important to safeguard a level playing field for low-carbon production and ensure that both instruments continue to work together as intended.

The Commission’s proposal also reinforces the use of ETS revenues to support industrial decarbonization through instruments such as the Innovation Fund and the Industrial Decarbonization Bank. Outokumpu strongly supports the proposal to reinvest the ETS revenues into industrial decarbonization to accelerate the deployment of low-emission technologies across Europe while rewarding companies that continue to invest in the transition. The proposed inclusion of permanent carbon removals also creates new long-term opportunities for Outokumpu as the company develops sustainable biomass-based solutions and explores carbon capture technologies to further reduce emissions. 

Outokumpu will assess the impacts of the Commission's proposal in more detail and will continue to engage constructively throughout the legislative process to support a policy framework that strengthens both industrial competitiveness and Europe's climate ambitions.

For more information:

Karoliina Rasi, Head of Public Affairs, Europe, tel. +32 476 349 263, Karoliina.rasi(at)outokumpu.com

Päivi Allenius, SVP – Communications and Public Affairs, tel. +358 40 753 7374 or Outokumpu media desk, tel. +358 40 351 9840, media(at)outokumpu.com

Outokumpu Corporation