What do we know about the development of climate strategies and the impact of the ETS in the economically and politically important sector of steel production? Steelmaking accounts for about eight per cent of total global CO2 emissions and about three per cent of EU CO2 emissions (EEA 2009). In July 2011 the European steel federation EUROFER took legal action against the European Commission over benchmarking rules (Euractiv 2011). Given the critical profile of the steel sector in the recent development of industrial benchmarks within the ETS, it might be tempting to see the sector as one of the main industrial stumbling blocks in EU climate policy. Furthermore, the generous distribution of free allowances, leading to a surplus has led at least one critic to denounce steel and other energy-intensive industries as ‘carbon fat cats’ (Sandbag 2010a). At the same time, important technology development work is being carried out within the European Steel Technology Platform, particularly ULCOS – the Ultra-Low CO2 Steelmaking programme (ULCOS 2011a). There are certainly puzzling elements in the climate profile of this sector, as further discussed in this chapter.