Why are industrial firms like SSAB concerned about the EU's proposed overhaul of the Emissions Trading System (ETS)?

SSAB and other industrial firms fear the EU's planned ETS overhaul will weaken the carbon pricing mechanism by, for example, granting additional free CO2 permits to companies — thereby eroding the competitive advantage of early movers who have already invested billions in low-carbon technologies like hydrogen-based steelmaking or electric melting, and potentially rewarding laggards who delayed decarbonization investments.

What is the core dilemma facing EU policymakers regarding the ETS reform?

The core dilemma is whether to maintain strict carbon pricing under the ETS to incentivize deep decarbonization investments, or to soften the system — such as by issuing more free allowances — in response to political backlash and concerns over industrial competitiveness and energy security, especially amid pressure from leaders like Italy’s Giorgia Meloni and Poland’s Donald Tusk.

Industrial Firms Warn EU Carbon Overhaul Could Benefit Polluters

Jun 30, 2026

Major industrial firms including SSAB and BASF warn that proposed EU reforms to the emissions trading system could undermine low-carbon investments by rewarding high-emission rivals. The debate highlights tensions between climate goals and industrial competitiveness amid rising energy costs.

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