HOEKSTRA:

BRUSSELS • European Climate Commissioner Wopke Hoekstra has firmly stated that the EU has no intention of suspending its Emissions Trading System (ETS) rules for the steel industry, despite calls to support the burgeoning defense sector. He confirmed, however, that a comprehensive revision of the ETS directive is scheduled for July 2026.

Brussels, May 27, 2025 – No free pass for the steel sector in its push to bolster the defense industry. In plain terms: no exclusion from the EU's Emissions Trading System (ETS). This is the clear message from Wopke Hoekstra, the European Climate Commissioner, who aims to bring clarity to the debate surrounding defense and the sustainability agenda. Jadwiga Wiśniewska, a Polish MEP from the European Conservatives and Reformists (ECR) group, had argued that "the steel industry will be crucial in ensuring an adequate material base for future armament programs," suggesting it should be exempted from common CO2 emission rules.

Hoekstra's response was definitive: "The Commission has no intention of suspending the ETS." However, change is on the horizon, as the European executive "is preparing a comprehensive review of the ETS Directive by July 31, 2026, as required by the current directive." This means legislative adjustments tailored to support a European steel industry vital for EU defense are possible, but there will be no rollback on the carbon emissions market.

Hoekstra firmly defended EU regulations and their scope. He emphasized that the ETS emissions trading system "enables the European Union to achieve its climate objectives at the lowest possible cost, allowing the market to set the price of carbon." Furthermore, he assured that it "includes integrated functionalities to protect sectors like steel from carbon leakage," meaning the relocation of production and emissions outside the EU. For the steel sector, options remain open, such as "free allocation of emission allowances, the possibility of state aid to compensate for indirect carbon costs for electricity-intensive production," like electric arc furnaces. In short, for Brussels, there is no reason to exempt the steel industry from sustainability rules, not even in light of the new European defense agenda.