Outokumpu, one of Europe's largest stainless steel producers, faces an unexpected challenge despite its early climate investments. The Finnish company sources 90% of its electricity from low-carbon sources and uses almost entirely recycled materials, positioning itself to capitalize on rising carbon prices.

However, EU policy rollbacks threaten to undercut these advantages. The bloc has weakened deforestation legislation, abandoned combustion engine targets, and introduced carbon credits into 2040 goals. Chemicals and aviation industries successfully lobbied for regulatory relief, citing competitiveness concerns.

Europe's emissions trading system (ETS) remains central to industrial decarbonisation, requiring companies to purchase CO2 permits. The current carbon price sits at €76 per tonne, significantly below Outokumpu's expected €100 target for 2030. This price differential determines competitive advantage between clean producers and heavy polluters.

Political backlash has intensified, with Italy and six other nations urging ETS weakening to reduce energy costs. Around 150 businesses counter that a robust system is essential for investment. Outokumpu's vice-president for sustainability warns that policy inconsistency harms industry more than any single regulation.