Regulatory framework
Along with the rest of the European steel industry, we are involved in the EU Emissions Trading Scheme (EU ETS).
EU ETS requires EU Member States to establish national CO2 emissions caps, to allocate emissions allowances to installations within industrial sectors and to encourage the development of a Europe-wide market in emissions allowances. 2007 was the last year of the first phase of the scheme. As in 2006, we experienced an overall surplus in allowances (that is, we emitted fewer tonnes of CO2 than our total number of allowances), principally as a result of our production plans not being realised. The second phase began on 1 January 2008, and although our targets are challenging, we expect to meet our environmental obligations.
The European Commission is consulting on a revised emissions trading directive to be applied post 2012. Through the European Confederation of Iron and Steel Industries (Eurofer), we are actively engaged in lobbying the Commission to oppose auctioning as the allocation methodology since this would leave energy intensive sectors, such as steel, hugely disadvantaged compared to international competitors. We are continuing to work closely with our international colleagues to advocate a global steel sector approach to climate change through the IISI.
