Company: MT
Filing Date: 2025-03-10
Form Type: 20-F
Source: 0001243429-25-000017
Chunk: 96

Company: ArcelorMittal
Filing Date: 2025-03-10
Form: 20-F
Chunk 96
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 to the 2030 ambition set by the European Climate Law. The EU also committed internationally to its 55% reduction target. Most of the initiatives of the Fit for 55 Package have been adopted as of December 31, 2024, amending several pieces of legislation that were already applicable to ArcelorMittal, such as the EU-ETS, the Renewable Energy Directive (“RED”) and the Energy Efficiency Directive (“EED”) as well as introducing the CBAM . CBAM is a tool to put an equivalent price to that faced by domestic production on the carbon emitted during the production of certain goods that are imported into the EU. The CBAM established a transition period of October 1,2023 to December 31, 2025, during which there will be no financial obligation besides the possibility of penalties being imposed for failures to report. There are some implementation rules stemming from the ETS and CBAM that are still currently under preparation. In addition, the Energy Taxation Directive (“ETD”) is expected to be revised in 2025. ArcelorMittal’s activities in the 27 member states of the EU are subject to the EU-ETS, which was launched in 2005 pursuant to European Directive 2003/87/EC, relating to GHG emissions. The EU-ETS is based on a cap-and-trade principle, setting a cap on GHG emissions from covered installations that is then reduced over time. Within this cap, companies receive emission allowances which they can sell to or buy from one another as needed. The limit on the total number of allowances available ensures that they have a value. In order to achieve the EU 2030 55% reduction ambition, the ETS requires sectors under ETS to reduce their emissions by 62%. As required by the EU Climate Law, the Commission has begun to define a Europe-wide 2040 target. In February 2024, the Commission presented its assessment for a 2040 climate target for the EU, recommending reducing the EU’s net GHG emissions by 90% by 2040 relative to 1990. The legislative proposal to amend the EU Climate Law with a 2040 target is expected in the first quarter of 2025. The review of the ETS will follow to reflect the adopted 2040 target. The implementation rules for the second trading period of Phase IV (2026-2030) will further reduce c urrent benchmark values , although the adopted approach will prevent a large disruptive decrease of the hot metal