Company: MT
Filing Date: 2025-03-10
Form Type: 20-F
Source: 0001243429-25-000017
Chunk: 97

Company: ArcelorMittal
Filing Date: 2025-03-10
Form: 20-F
Chunk 97
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 benchmark. Still, the resulting shortage in free allocation levels would put the European steel industry at a significant disadvantage versus global competition (see note 9.1 to the consolidated financial statements). To prevent such disadvantages, CBAM has been established for a limited number of sectors, including steel, with a transitional period that started in October 2023 and runs until the end of December 2025, with the initiation of CBAM payments in 2026. In the case of the steel sector, only direct emissions will be covered, at least through 2025, allowing access to indirect cost compensation. On the other hand, free allocation to covered sectors will be progressively phased out as follows: 2026: 97.5%, 2027: 95%, 2028: 90%, 2029: 77.5%, 2030: 51.5%, 2031: 39%, 2032: 26.5%, 2033: 14%, and 0% as from 2034. The agreement does not include a solution for exports but requires the European Commission to prepare an assessment and report by 2025. Several implementing acts to supplement the CBAM regulation are still to be developed. Moreover, the revised Renewable Energy Directive (“RED”) was adopted in November 2023, increasing the current EU-level target of at least 32% of renewable energy sources in the overall energy mix to at least 42.5% by 2030. Member States must also collectively endeavor to increase the share of energy from renewable sources in the EU’s gross final consumption of energy in 2030 to 45%. The RED aims to deploy renewables across all sectors, particularly in sectors where progress in integrating renewables had been slower. Additionally, the revised Energy Efficiency Directive (“EED”) raised the EU energy efficiency target, making it binding for EU countries to collectively ensure an additional 11.3% reduction in energy consumption by 2030 compared to the 2020 reference scenario projections. In addition, the revised Land Use, Land Use Change and Forestry (“LULUCF”) sets a target for net GHG removals at 310 million tonnes of CO 2 equivalent as a sum of the values of the GHG net emissions and removals by Member States in 2030. The LULUCF sector is connected to all ecosystems and economic activities that rely on the land and the services it provides, thus directly impacting ArcelorMittal’s sites. Furthermore, the Eco-design