Outokumpu urges strong EU carbon pricing to support industrial decarbonisation
Outokumpu has called for a strong and predictable carbon pricing framework after the European Commission published its proposed review of the EU Emissions Trading System (EU ETS) for the 2031–2040 period.
The Finnish stainless steel producer welcomed the Commission’s proposal, published on 17 July 2026, saying the EU ETS must remain the central tool for reducing industrial emissions and supporting Europe’s transition towards a competitive low-carbon economy.
Outokumpu said maintaining a robust carbon price signal is essential to encourage companies to invest in cleaner technologies and reward businesses that have already committed to reducing emissions. The company warned that weakening carbon pricing incentives could slow industrial decarbonisation efforts and reduce Europe’s ability to compete in global low-carbon markets.
The company expressed concerns over proposals to delay the planned phase-out of free emissions allowances, arguing that such a move could weaken incentives for industrial transformation and undermine the effectiveness of the Carbon Border Adjustment Mechanism (CBAM).
Outokumpu also said adjustments to the EU ETS Linear Reduction Factor (LRF), which determines the annual reduction rate of emissions allowances, should be limited to ensure alignment with the European Union’s 2040 climate targets. The company argued that maintaining ambition within the system is vital to preserving Europe’s climate leadership.
Heidi Peltonen, Vice President of Sustainability at Outokumpu, said the company has consistently supported a strong and predictable carbon pricing system that encourages investment in industrial decarbonisation while creating fair competition for low-emission producers.
She said businesses require long-term policy certainty to make major investments and warned that reducing the strength of carbon pricing would send the wrong signal to industries working to cut emissions.
Outokumpu highlighted the importance of combining a strong EU ETS with a fully implemented CBAM to prevent carbon leakage and protect European manufacturers investing in cleaner production methods. The company said CBAM will become increasingly important as free emissions allowances are gradually reduced, ensuring that low-carbon producers are not disadvantaged by competition from regions with weaker climate regulations.
The company also welcomed proposals to use EU ETS revenues to fund industrial decarbonisation initiatives, including the Innovation Fund and the proposed Industrial Decarbonisation Bank. Outokumpu said reinvesting carbon market revenues into low-emission technologies could help accelerate Europe’s industrial transition while supporting companies investing in climate solutions.
The Commission’s proposal to include permanent carbon removals within the framework could also create new opportunities for Outokumpu as it develops sustainable biomass-based solutions and explores carbon capture technologies aimed at further reducing emissions.
Outokumpu, which describes itself as Europe’s leading producer of low-emission stainless steel, said it will continue analysing the EU ETS review proposal and engaging with policymakers throughout the legislative process. The company said it will advocate for a framework that balances industrial competitiveness with Europe’s long-term climate objectives.
