The carbon dioxide intensive sector in Asturias will follow a gentler timetable to meet emission reduction goals and to phase out free carbon credits.
The European Council and Parliament reached a provisional agreement earlier this Sunday, pending ratification by the 27 member states. The plan envisions harmonization beginning in 2026, matching the original proposal from the European Commission, but with a slower pace in the initial years: a 2.5 percent cut in 2026, 5 percent in 2027, 10 percent in 2028, and 22.5 percent in 2029.
Free rights. The agreement calls for the definitive abolition of free carbon credits for major emitting industries by 2034, a timeline slightly more comfortable than Parliament’s stance. While it suggests the credit expiry could occur a year later than initially intended, the Commission and Council have advanced a gradual approach to phasing out free emissions for factories and carbon-intensive technologies that rely on cleaner alternatives, making the shift more manageable.
The European Commission, the Union’s executive arm, initially pushed for a tougher path with faster reductions: 10 percent in 2026, 20 percent in 2027, 30 percent in 2028, and 40 percent in 2029. The outcome follows a plan that starts slower and accelerates toward the end of the period.
For Asturias steel, the 2034 deadline provides a window to adapt as blast furnace A has already ceased to operate and is slated to be replaced by an electric arc furnace at the Gijón works, along with a hybrid system and an iron ore direct reduction furnace since blast furnace A will expire in 2024 and blast furnace B will run down by 2032. This would not have happened if a competing proposal from the European Parliament had passed; that alternative, if adopted, would have begun adjustments in 2025 and concluded in 2030, completing its lifecycle earlier.
CO2 reduction. The interim agreement between the two EU co-legislators would push to cut the emissions market by 62 percent of CO2 tonnage by 2030, a target investigated for feasibility before final approval. Emissions from European industry have fallen roughly 41 percent since 2005 according to the Council of Europe, and the new plan signals a more ambitious shift toward carbon neutral production methods to curb climate change.
The plan proposes raising the reduction rate to about 4.3 percent per year from 2024 to 2027 and about 4.4 percent from 2028 to 2030.
Climate schedule. The environmental policy will be balanced with a border adjustment mechanism, a tariff on imports of steel, cement, aluminum, fertilizer, electricity, and hydrogen from non-EU countries, designed to be implemented in tandem with the emissions reductions. It launched with looser rules and no penalties for CO2 emissions and will begin its implementation in 13 countries. It will start effect in October but will not be fully in force until 2026 when carbon credits begin to be phased out.
The Council clarified that the border regulation will apply only to emissions that do not receive free emission rights.
Export. An estimated 47.5 million euros will be redirected from states’ emission rights auctions to safeguard European exports facing favorable environmental rules abroad, aiming to neutralize the risk of carbon leakage. Before 2025, the European Commission will assess this risk and, if necessary, propose measures to prevent it.
Innovation Fund. The two co-legislators agreed to boost the Innovation Fund by an additional 125 million. With total resources reaching 575 million, the fund will run through 2030 to support investments in green technologies across European industry. Asturian Member of the European Parliament Jonás Fernández notes that ArcelorMittal has already proposed several projects under this program.
Transport and homes. The shipping sector will participate in the emissions trading system, covering 40 percent of its emissions in 2024, rising to 70 percent in 2025 and to 100 percent in 2026. A separate regime for fuel distributors serving buildings will operate alongside the general system, addressing emissions from road transport, the residential sector, and heating. It will start in 2027 but could be delayed to 2028 if energy prices spike, with extra rights released if prices exceed 45 euros.
Social Fund for Climate. A Social Fund for Climate, totaling 65,000 million, will help vulnerable households, small businesses, and transport users cope with the new emission rights framework.
Asturian MEPs Jonás Fernández and Susana Solís and FADE celebrate the decision
The agreement reached by the Council and Parliament is welcomed in Asturias by the local representatives Jonás Fernández and Susana Solís and by FADE, the Asturian employers’ association. Fernández, from the PSOE, described the approved schedule as favorable for Asturias industry because it delays the expiry of free emission rights until 2034 and slows their elimination by reducing the annual pace of cuts compared with the original EU plan. He added that the new framework gives industry time to transition without risking jobs, noting that the Environment Committee had pushed a tougher stance that the plenary later moderated.
Solís, a member of Citizens, said that Asturias has long sought competitiveness through a realistic timetable and a mechanism to protect exports. She highlighted the two key points that reflected industry needs: a gradual implementation timeline and a border adjustment mechanism designed to shield Asturian products. Emissions rights are being phased in with a careful approach that lets producers adjust, and the export protection mechanism aims to keep market access stable.
María Calvo, head of FADE, welcomed the agreement and argued that the new calendar minimizes harm to the local industry while supporting decarbonization. FADE remains concerned with preserving competitiveness and calls for the border mechanism to be activated promptly with ongoing monitoring and a chance to measure real impact before reducing free rights. Additional European funds should also be accelerated to support a smooth transition.