Explosive energy prices threaten Europe's climate neutrality

Soaring electricity and gas prices in Europe pose serious challenges for steel processing and jeopardize the ambitious goals of climate neutrality and the circular economy in Germany and at the EU level, reports Callanisch of the German Federation of Steel Recyclers BDSV.

“Like many other companies, BDSV member companies are increasingly at risk of not being able to produce economically,” the association said at its annual conference in Darmstadt last week. “If politicians do not quickly defuse the situation, this could mean permanent loss of jobs. In addition, rising energy costs and unsecured energy availability are threatening companies in the steel and steel industry, with a direct negative impact on the amount of scrap metal.”

According to the BDSV, the reactivation of the Economic Stabilization Fund (WSF), introduced by the German government in September to mitigate the effects of a sharp increase in energy prices, is an important first step in the right direction. “Now it is important that the announced brake on energy prices works quickly and is effective enough for medium-sized companies,” he adds.

At the EU level, the valuation order principle needs to be changed as soon as possible so that electricity prices are no longer pegged to gas prices. In addition, BDSV and its partner associations called on the European Commission to include processing in the list of economic sectors eligible for EU assistance.

BDSV has repeatedly pointed out that a free global trade in steel scrap is vital for German and European recycling companies. Currently, only about 80% of the steel scrap produced in Europe comes from smelters and foundries. Almost 20 million tons of environmentally friendly raw materials from recycling are exported from the EU.

"The restriction on trade and the resulting closure of end markets for secondary raw materials will have a negative impact on waste collection, recycling and investment in processing capacity expansion," BDSV said.

Already today it is possible to increase the share of defects in the domain route from the current 20% to 30%, as it is successfully done in the US and China, he added.

The steel processing industry expects additional CO2 savings from expanding the steel production route using electric furnaces. In addition, BDSV has campaigned for a "disposal bonus" for integration into the European Emissions Trading Scheme.