voestalpine joins almost 80 European industrial companies in calling for the extension of free CO₂ allowances

The 79 industrial companies, together representing about 500,000 employees in Europe alone, are addressing an open letter to high-ranking European policymakers, urging them to abandon the planned phase-out of free allocations from 2026 to 2034 and to extend this deadline.

Currently, voestalpine pays around EUR 200 million per year for CO₂ allowances into the budget of the Republic of Austria. With the planned reduction of free allowances between 2026 and 2034, these costs would multiply: Between now and the end of 2030, the company would have to spend an additional EUR 1 – 2 billion to meet the growing demand for allowances.

“The planned elimination of the free allowances would mean a huge loss of competitiveness and jobs for voestalpine, as well as a setback for the greentec steel transformation project. Further investments in the transformation would no longer be economically viable. Important production process steps could no longer take place in Austria,” says Eibensteiner. voestalpine has already made substantial investments in transforming its steel production. With its greentec steel program, the company will have invested one third of the total EUR 1.5 billion budget from its own funds by the end of March 2025, with the goal of reducing its emissions by 30% by 2029. This is equivalent to 5% of Austria’s total CO₂ emissions.

For voestalpine, extending free allowances is a key factor for maintaining competitiveness and securing future investments, as well as safeguarding a total of 23,300 jobs in Austria. voestalpine generates annual value added of almost EUR 8 billion in Austria and pays a total of EUR 2.4 billion in taxes and social security contributions per year, both directly and indirectly. The steel and technology group is one of the country’s most powerful economic drivers.

The CO₂ border adjustment mechanism (CBAM), set to be fully implemented in 2026, is definitely not an alternative to phasing out free allocations, as it does not offer comprehensive carbon leakage protection for companies. “We remain at a disadvantage in exports, while competitors exploit loopholes in imports. The emissions trading system, promoted as a competitive advantage, risks becoming an industrial and climate policy dead end if the technological prerequisites for transformation are not realistically considered. There is no alternative to extending free allowances for industry,” emphasizes the CEO of voestalpine AG.