On the other hand, we are convinced that the contribution made by using our products to increasing energy efficiency in the economy as a whole must play a central role, as reducing emissions from greenhouse gases will only be successful if processes and products are optimized from technological and energy considerations.
Salzgitter AG is committed to comprehensive climate protection. The dedication of our experts in production and research has enabled us to significantly lower our emissions and approach the minimum technically possible in the blast furnace process. Thanks to the various measures taken by the steel companies, the specific CO2 emissions have fallen by more than 20 % in comparison with 1990.
The steel industry is faced with fierce competition in the international arena. It would be threatened by offshoring production if unilateral cost burdens were placed on locations in Europe, for instance through emissions trading. This has been explicitly ascertained by the EU Commission in its decision to classify sectors with carbon leakage risk. However, until there is an internationally binding treaty under which steel production in major industrial nations and emerging markets outside the EU are all subject to similar requirements, emissions resulting from the laws of chemistry and physics inherent in the processes, which can therefore not be reduced any further, must also be taken into consideration in the future structuring of emissions trading. Otherwise we would have a considerable disadvantage in comparison with our non- European competitors in terms of cost structure, which we would not be able to pass on to the market through our products. In the political discussion process, we therefore advocated an allotment of emission rights on the basis of ambitious but nonetheless achievable CO2 benchmarks.
Unfortunately, this standpoint is not being reflected to the necessary extent in the decisions of the EU Commission. For example, the value allocated to pig iron, so critical for the European steel industry, has been set around 10% below what is technically possible. This fails to take account of the regulations explicitly defined under the EU Emissions Trading Directive for electricity generated from gases that are a byproduct of steel production. Salzgitter AG has therefore decided, together with other steel producers and EUROFER, the European Steel Association, to dispute the Commission's decision through legal channels. Apart from demonstrating a lack of appreciation of the inner-European legal standpoint, the decision that the steel industry is contesting, as we see it, also represents a fundamental break with the basic idea behind climate protection in Europe: The EU's declared intention is to lead the way by demonstrating the compatibility of economic prosperity and lower CO2 emissions. In our view, however, the EU Commission's decision that has come under criticism will engender increasing resistance and blockage from the steel industry outside Europe to the question of potentially extending the reach of emissions trading beyond the EU. This would not be conducive to promoting international climate protection nor would it encourage an internationally level playing field essential from an economic point of view.