Brussels – A six-point strategy to “save our steel.” Not only new restrictions on imports from third countries and combating unfair trade but also a greater push for low-carbon technologies and more ambitious targets on ferrous scrap recycling. Today (March 19), the European Commission unveiled an action plan for steel and metals, whose production—once the backbone of the European project itself—has entered a deep crisis. “We owe it to our history,” said Executive Vice President for Industry, Stéphane Séjourné.
The data are merciless. According to IndustriALL – Europe, the European Federation of Industry Unions, the European steel industry has lost nearly 100,000 jobs since 2009. EU steel production has been steadily declining for years: from 160 million tons in 2017 down to 126 million tons in 2023. Without a functioning heavy industry, the European Commission’s various plans for automotive revitalisation, rearmament plan, and the
Clean Industrial Deal
itself are likely to remain just empty words.
“We need to help our steel producers who are facing strong headwinds on the global market,” insisted European Commission President Ursula von der Leyen. The action plan presented by Séjourné hypothesises a number of “short- and medium-term” solutions, the result—at least in part—of the Strategic Dialogue on steel that the EU executive has been pursuing with industry associations and all stakeholders. “From combating unfair trade to closing loopholes in the carbon adjustment mechanism at the border and recognising the strategic and environmental value of steel scrap, the action plan identifies crucial areas for our industry,” acknowledged Henrik Adam, president of the European Steel Association (Eurofer). However, he pointed to “the elephant that remains in the room”: high energy prices.
Energy costs account for a very large share of production costs for metals and steel, more than for other sectors. Even before the energy crisis, this share amounted to about 17 per cent for steel and 40 per cent for aluminium. During the 2022 energy crisis, energy costs reached 80 per cent of total production costs. Even today, the energy bills of European industries are three times higher than those of overseas competitors.
The European Commission has identified hydrogen as a possible key to offering an alternative to direct electrification, which is “not always possible or affordable.” In essence, as already announced with the Clean Industrial Deal, Brussels will present a delegated act with rules that are “as flexible as possible” to meet greenhouse gas emission reduction targets to trigger an “abundant and affordable supply of renewable and low-carbon hydrogen.” Including, for example, that produced by nuclear power.
The EU executive will try to do more to protect European industry from unfair competition practices. It is an industry already facing 25 per cent import tariffs on steel and aluminum put in place by Donald Trump, which according to the European Commission, “will not only have a negative impact on EU producers by limiting their access to the US market,” but will also “increase pressure from exports previously destined for the United States, which could be redirected to the EU.” The plan calls for the adoption of a new long-term safeguard clause by the end of the year to replace the current one expiring in June 2026. This clause would impose a cap on hot-rolled steel imports from several countries relative to total EU demand.
Then there is the intention, widely anticipated in recent months, to propose, by the end of the year, a revision of the carbon border adjustment mechanism (CBAM) to prevent non-European industries from “greenwashing their metals” to appear low-carbon while continuing to rely on high-emission energy sources. “We will do our best to propose rules compatible with those of the World Trade Organization,” Séjourné assured.
On a parallel track must run the promotion of recycling, which is “key to reducing emissions and energy consumption in the metals industry.” According to European Commission estimates, recycling can save “up to 95 per cent and 80 per cent, respectively, of the energy needed for the primary production of aluminium and steel,” as well as reducing the EU industry’s dependence on raw material imports. Brussels “intends” to set targets for recycled steel and aluminium in key sectors and consider whether other products, such as building materials and electronics, should have recycling requirements or recycled content. It will also consider trade measures to reverse the record growth trend in scrap metal exports, an input “vital to decarbonized steel.”
Several European NGOs, including the Climate Action Network Europe, the European Environmental Bureau and the WWF European Policy Office, issued a statement denouncing the lack of “necessary benchmarks, targets and concrete actions” in the European Commission’s plan. The civil society organizations argue that Europe’s steel sector “requires a bold and revolutionary strategy to phase out polluting fossil fuel-based production, accelerate the adoption of ambitious recycled content targets and ensure a fair transition for workers.”
English version by the Translation Service of Withub
