The European steel industry faces a crucial turning point: the definition of ‚green steel‘ will significantly determine in the future which products are favoured in public procurement procedures and funding programmes. This will have considerable effects on investments throughout the entire value chain. The BDE German Federal Association for Waste Management, Water and Circular Economy is therefore calling for a clear classification that is based exclusively on actual greenhouse gas emissions.
Against the backdrop of upcoming European decisions on the definition of „green steel“ – including within the framework of the Ecodesign for Sustainable Products Regulation, the Clean Industrial Deal, and the planned Industrial Accelerator Act – the BDE is pushing for a classification based solely on actual greenhouse gas emissions.
According to the Joint Research Centre of the European Commission (JRC), the steel industry accounts for around five to six percent of the European Union's total greenhouse gas emissions. How the future climate label is designed will be decisive in determining which products are favoured in public procurement procedures and funding programmes. The classification system thus sets crucial incentives for the raw material and energy transition along the entire value chain.
Criticism of the LESS system
The BDE is particularly critical of the Low Emission Steel Standard (LESS) system developed by the German Steel Federation, which operates with a so-called ‚sliding scale‘. This links the permissible emission threshold to the proportion of scrap metal used, which can lead to a distortion of the actual climate impact. The LESS system allows steel products manufactured via the emission-intensive blast furnace route with a low recycled content to be classified in the same category as products with a high recycled content and lower emissions.
„A green steel label must show at first glance how many greenhouse gas emissions are actually generated per tonne of steel. The sliding scale approach anchored in LESS directly counteracts this objective: the ore-based oxygen route causes more than three times as many greenhouse gas emissions as the electric steel route, but receives the same LESS class. The JRC rightly rejects this distortion and relies on non-discriminatory, purely emissions-based classes. This approach must be maintained. Only in this way will procurement officers receive reliable guidance and only in this way will the use of recycled raw materials be strengthened, instead of slowing down the transformation of the steel industry by regulation,“ explains Bernd Fleschenberg, Chairman of the Metal Recycling Working Group in the BDE.
Demands of the BDE
The BDE has put forward four key demands for the future definition of green steel:
- The classification must be based on the absolute Product Carbon Footprint on a cradle-to-gate basis.
- The upstream supply chain must be fully integrated to avoid the relocation of emission-intensive production steps to countries outside the EU.
- Ambitious class limits must be set that are oriented towards the absolute CO2 footprint and reward particularly low-emission products.
- A binding reduction pathway must be established in the delegated act to ensure planning and investment security.
The forthcoming decision on the definition of green steel is not only significant for the steel industry but also for European industrial policy as a whole. It will provide crucial incentives for the raw material and energy transition along the entire value chain.
SourceBDE Federal Association of the German Waste Management, Water and Circular Economy
