According to the Federal Association of the German Foundry Industry (BDG), the new EU ETS benchmarks introduced by the European Commission could substantially reduce the volume of free allowances for some foundry enterprises as early as this year. The association believes this creates disproportionate pressure on energy-intensive industries competing with suppliers from China and India, where similar carbon costs are currently absent. This primarily affects enterprises that account for a significant share of cast iron production in Germany and operate in a globally competitive environment.
What Causes Concern in the Foundry Industry
In the BDG's assessment, the proposed benchmarks essentially require the foundry sector to multiply its efficiency without corresponding technological changes in production equipment. The association argues that the new approach over-generalizes various process types, including electric and fossil-fuel technologies, despite their significantly different decarbonization potentials. As a result, some enterprises may receive fewer free emission permits than their actual technical operating conditions allow.
The BDG report states that out of approximately 4,000 foundries in the EU, only 22 are part of ETS 1, and 11 of those are located in Germany. However, these specific companies produce nearly half of the country's cast iron. According to the association's calculations, the additional burden for German foundries within the fourth trading period could reach up to 100 million euros. Specifically, the BDG emphasizes that reducing benchmarks by 40-50% with retroactive effect to 2026 would mean costs in the millions of euros for each affected enterprise.
Market Impact and Solutions from winox.ua
For the European metallurgical and foundry market, such regulatory changes mean further pressure on production costs, investment programs, and price competitiveness. If emission costs rise faster than the availability of electrification, grid infrastructure, and "green" electricity, it increases the risk of so-called "cold decarbonization"—the loss of industrial added value without a sufficient environmental effect. For buyers of metal products, this could lead to higher price volatility and more complex procurement planning.
In such an environment, reliable supply channels and predictable procurement conditions become particularly important for industrial consumers. As a supplier of rolled metal, stainless steel, and non-ferrous metals, winox.ua operates with the logic of stably meeting clients' production needs. Given the regulatory changes and increasing pressure on European manufacturers, the market especially values partners capable of maintaining stable supplies and a balanced pricing policy for the B2B sector.
The European Commission's Position and Future Consequences
It is worth noting that on May 12, the European Commission proposed updated EU ETS benchmark values for 2026-2030. According to previously released data, the document also envisions providing the industry with a larger volume of free permits in the coming years, potentially saving companies about 4 billion euros in CO2 costs. However, industry associations are focusing not just on the total volume of support, but on the calculation methodology for specific sectors.
For the foundry industry, the key issue remains aligning climate goals with the actual technical capabilities of enterprises. The BDG emphasizes that the industry supports the path toward climate neutrality but insists on competitive electricity prices, infrastructure development, and effective cross-border carbon regulation. The success of the ecological transformation—whether it becomes a tool for production modernization or a factor in the loss of industrial capacity in Europe—will depend on these framework conditions.