Industry coalition calls for stronger low-carbon steel rules under ESPR

A broad coalition of steel industry representatives, environmental organisations and technical experts has called on the European Commission to strengthen the upcoming Ecodesign for Sustainable Products Regulation (ESPR) framework for low-carbon steel.

In a joint statement published in Brussels on May 12, the signatories warned that the current proposal developed by the Joint Research Centre (JRC) does not provide sufficient incentives for real decarbonisation investments or the creation of effective lead markets for low-carbon steel.

Concerns over current classification system

According to the coalition, the proposed performance classes fail to clearly differentiate between conventional and genuinely low-carbon steelmaking routes.

The statement argues that some major investments in decarbonisation technologies would not lead to meaningful classification improvements under the current model. Examples cited include natural gas-based DRI-EAF production being grouped together with both conventional blast furnace routes and hydrogen-based steelmaking in certain product categories.

The coalition warned that this approach risks weakening incentives for further emissions reductions and technological progress.

Call for near-zero steel benchmark

The signatories are calling for the highest performance class to reflect near-zero steel production aligned with EU climate targets.

They argue that such a benchmark would create a long-term investment signal for the industry while allowing public procurement and private markets to gradually move towards higher sustainability standards.

“We call on the Commission and the JRC to increase the ambition level of the performance classes for lead market regulations,” the statement said.

Sliding-scale model proposed

The coalition also criticised a purely carbon footprint-based approach, arguing that it overlooks structural limitations in scrap availability and the continued importance of primary steel production for high-quality grades.

Instead, the signatories advocate a sliding-scale model combining CO₂ intensity and recycled content. According to the statement, this would create a technology-neutral framework capable of rewarding emissions reductions across all production routes, including scrap-based, hydrogen-based and renewable-powered steelmaking.

The proposal is also intended to avoid carbon leakage and market distortions while remaining compatible with international trade frameworks.

Push for simpler and more practical rules

Another key concern is the potential administrative burden of the proposed system.

The coalition urged the Commission to focus on core production stages such as hot-rolled steel and to build on existing certification schemes including LESS and ResponsibleSteel rather than creating overlapping reporting systems.

The statement calls for a “lean and operable classification system” that can be implemented efficiently across the steel value chain.

Industry seeks quick implementation

The signatories stressed that timing is critical, noting that the first large-scale European DRI plants are expected to start production in 2027.

According to the coalition, delays in implementing the ESPR Delegated Act could undermine Europe’s ambitions to establish lead markets for green steel and weaken the competitiveness of early decarbonisation projects.

The group therefore urged the Commission to finalise the regulation and establish a functioning certification and lead market framework by 2027.

The signatories also offered support for the further development of the system, including participation in pilot projects and technical consultations on certification and decarbonisation pathways.

Source: LESS aisbl Photo: Fotolia