Annex B: Decomposition of CO2 emissions from iron and steelmaking in the EU

Iron and steel industry plays an important role for value creation and employment in the EU 27, It is also the industrial sector with the highest absolute CO2 emissions. Since the introduction of the European Emissions Trading System (EU ETS) 1 in 2005, total sector emissions covered by the scheme have declined from 235 Mt CO2 to 178 Mt CO2, in 2022. With two rounds of scope extensions of the EU ETS, emissions from installations now covered by the scheme have most probably declined even stronger. These figures also do not include indirect emissions from electricity consumption, which are particularly important on the electric arc furnace (EAF)-route. The effect of the decarbonization of the electricity supply decreased emissions by another 10 Mt CO2. In this paper we are able to shed light on the importance of different drivers of the declining trend, including both direct and indirect emissions, and with a special focus on the role of the EU ETS.

Final Report: Effectiveness of EU Emissions Trading: What drives emission developments?