17 June 2026 – Four major steel and chemical corporations are calling on the European Council to freeze emissions trading – and are unintentionally providing the best argument for abolishing it altogether. European Parliament Votes in Favor of EU-U.S. Trade Agreement – Council Decision to Follow.
EU ETS and CBAM: Why Not Abolish Them Altogether?
Four major steel and chemical corporations are calling on the European Council to freeze emissions trading – and are unintentionally providing the best argument for abolishing it altogether.
What the Corporations Are Demanding
In a letter to the European Council, four major steel and chemical corporations have called for the EU ETS to be frozen and fundamentally overhauled. Their justification: as the free allocation of certificates is phased out by the mid-2030s, companies such as thyssenkrupp Steel Europe and ArcelorMittal would face excessively high CO2 costs. According to Politico, the letter also calls for a substantial expansion of the CBAM carbon border tax to downstream products.
Who Is Actually Being Subsidized Here?
To this day, both sectors receive substantial quantities of free ETS certificates – meaning taxpayers effectively cover these manufacturers’ CO2 costs. For basic chemicals, the chemical sector is even allocated more certificates than it actually emits.
In particularly CO2-intensive steel production, the imbalance is even more severe. In 2025, European steel producers received around 40% more free ETS certificates than they needed. These surplus certificates can be traded – and were traded. Between 2005 and 2025, this surplus alone amounted to a hidden subsidy of almost EUR 20 billion. In total, European steel producers have collected around EUR 79 billion in subsidies for their crude steel production since emissions trading was introduced – in addition to national CO2 compensation mechanisms such as Germany’s recently expanded electricity price compensation scheme.
When the sector’s largest recipients of transfer payments are now demanding an extension of the free allocation because EUR 75 per tonne of CO2 is supposedly too expensive for them, the plain meaning is this: European citizens and the Mittelstand are expected to keep paying, while the proceeds from selling surplus certificates continue to flow into shareholders’ pockets. And by expanding CBAM, everyone else in the EU is supposed to pay even more as well.
Cracks in the Steel Industry’s Façade
The letter reveals something else: there is considerable turmoil among the steel producers themselves. The demands made by thyssenkrupp and ArcelorMittal clearly contradict the position of producers such as Salzgitter AG or Saarstahl, which is close to the German SPD. Anyone who has already begun converting production in preparation for the end of free certificate allocation naturally has no interest in freezing the system – after all, they bet on CO2 costs continuing to rise.
The Only Consistent Demand
After 21 years of operation, it should have become clear by now that the EU ETS is dysfunctional. It was only when the CO2 price began rising in 2019 that there was any movement at all in an otherwise investment-averse steel industry. Now that the end of transfer payments is approaching, the complaints are becoming frantic – because, for the first time, these corporations are actually expected to pay for their emissions, while other market participants have been doing so for a long time. At the same time, they want to continue benefiting from subsidies while using CBAM to impose additional burdens on everyone else.
This leaves only one realistic conclusion: the EU ETS and CBAM must be abolished. That would not be a step backwards, but a genuine competitiveness boost for Europe – benefiting companies and citizens alike.
Thorsten Gerber, CEO of the Gerber Group, commented: “When I currently read about company closures, it is small and medium-sized businesses that are being forced to give up. In my view, much of this is due to politicians fulfilling the completely excessive demands of corporations that can never get enough subsidies, while demanding still more restrictions, regulation, and market protection.” He continued: “Just learn to work properly and manage without the state. What else are these corporate executives being paid such lavish salaries for?!”
European Parliament Approves Tariff Legislation for U.S. Trade Agreement
On Tuesday, the European Parliament adopted two regulations implementing the Turnberry Agreement with the United States: duty-free access for U.S. industrial goods and preferential access for U.S. agricultural and fishery products. In return, the legislation is accompanied by a sunset clause expiring at the end of 2029, a suspension mechanism in the event of persistently high U.S. tariffs on steel and aluminum derivatives, and a new safeguard procedure to protect EU industry.
Bernd Lange, Chair of the European Parliament’s International Trade Committee, INTA, and a member of S&D, described the outcome as a significant improvement over the Commission’s original proposal: stronger democratic oversight, regular reporting obligations for the Commission, and the possibility of taking countermeasures in the event of breaches of the agreement by the United States.
The outcome now on the table is not uncontested, however. Only 440 Members of the European Parliament voted in favour, while 151 voted against and 50 abstained. The Council must still give its formal approval before the legislation can finally enter into force.
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