Ulrich Adam, Director General of Orgalim, warned on April 14 that a combination of the Carbon Border Adjustment Mechanism (CBAM), the phaseout of Emissions Trading System (ETS) free allowances, and new European steel safeguards could push manufacturing outside the EU. In an editorial, Adam argued that the 'triple legislation whammy' would increase steel and aluminium costs by up to 48%, threatening the competitiveness of Europe's technology manufacturers. He noted that 75% of surveyed products are at risk of relocating outside the EU by 2034.
Adam acknowledged recent policy adjustments, including the extension of CBAM to downstream products and the creation of a Temporary Decarbonisation Fund, as proposed by Commissioner Wopke Hoekstra on April 10. However, he insisted that further reforms are needed: restoring export competitiveness, minimising administrative burdens by postponing the first CBAM declaration deadline to December 31, 2027, and introducing an 'emergency break' to remove goods from CBAM scope if prices surge excessively.
The editorial follows a series of EU policy developments. On April 9, Commissioner Valdis Dombrovskis proposed temporary measures to address energy prices, including lowering electricity taxes and modernising the ETS. On March 27, he highlighted the risk of stagflation from Middle East conflicts. On March 25, Commissioner Dan Jørgensen outlined flexible measures to curb energy prices, including a €30 billion ETS Investment Booster. On March 17, MEPs clashed over CBAM expansion, with some warning of fraud risks and others advocating for strong safeguards. On January 28, Hoekstra proposed flexible CO2 standards and expanded CBAM to balance climate and competitiveness.
Adam's call for reforms reflects industry concerns that the current policy mix undermines the EU's industrial base, jobs, and investment attractiveness, potentially jeopardising long-term climate goals.
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