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Iron ore pellets in the EU Emissions Trading System

Question écrite de Mme Arba KOKALARI - Commission européenne


Subject: Iron ore pellets in the EU Emissions Trading System

The Swedish mining company LKAB has been informed that iron ore pellets will be classified under a different Emission Trading System (ETS) benchmark than their substitute, iron ore sinter. These two iron ore products can be and are used interchangeably. Studies on the subject clearly state this as well. Furthermore, LKAB’s iron ore pellets are produced in a more energy-efficient and less carbon- intensive way than iron ore sinter. Consequently, categorising iron ore pellets under a different benchmark to their substitute could incentivise more carbon-heavy manufacturing of products using iron.

In the light of these circumstances and consequences, will the Commission reconsider its decision on the classification of iron ore pellets under the ETS?

Réponse - Commission européenne

Diffusée le 8 septembre 2020

Answer given by Executive Vice-President Timmermans on behalf of the European Commission (9 September 2020)

Under the EU Emissions Trading System (ETS), iron ore pellets and sinter are not considered to be the same product and are not covered by the same product benchmark. The European Court of Justice (ECJ) confirmed the position of the Commission in its ruling in Case C-80/16. The ECJ ruled that:

[...] pellets and sintered ore cannot generally be substituted for one another and are not, therefore covered by the same product benchmark. Indeed, pellets and sintered ore are different not only in their product characteristics but also in their composition (1).

The definition of the benchmarks applied for calculating free allocation was not modified in the most recent revision of the ET S (2). Therefore, sinter and iron ore pellets will continue to receive free allocation based on different benchmarks in the period 2021‐2030.

Given the low number of installations producing iron ore pellets in Europe, no specific benchmark for iron ore pellet production has been defined. Installations concerned have received free allocation based on the heat benchmark (as no product benchmark could be applied to them) in line with the relevant legal provisions in place.

⋅1∙ http://curia.europa.eu/juris/liste.jsf?language=en&num=C-80/16

⋅2∙ Directive (EU) 2018/410.



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