European Elections 22-25 May 2014

Expectations of the steel industry

Prospects for the steel industry in Europe

The steel industry is deeply rooted in the European Union. Its history in Europe is characterized by continuous and successful adaptation to requirements of customers, but also to structural changes. Today, the EU steel industry embodies the opportunities of technological development and positions itself in the global market as a manufacturer of high quality products which are essential for almost all industries. The framework conditions for competitiveness and industrial innovation are increasingly determined in Brussels.

The European Commission has developed an action plan for this industry, which has suffered from the economic crisis since 2008. The Heads of State and Government reaffirmed most recently at their summit in March their recognition of the industry as a growth and job engine. An engine needs fuel to run, in this case the steel industry needs a stable, balanced regulatory policy on the one hand and free, fair trade on the other.

Affordable and competitive energy

Private consumers and businesses need affordable energy. Competitors in the Single and global markets need competitive energy prices, in particular energy-intensive industries. Energy is the second largest cost factor in steel production, after raw materials and before labour costs. At the same time the cost of energy is strongly influenced by European policies. By helping ensuring globally competitive energy prices for these industries, the European Parliament will also help securing strong industrial value chains, jobs and growth in Europe.

Industry Compatible Emissions Trading

The CO2 emission reduction pathway of the European Emissions Trading System (EU ETS) of 21% in 2020 and 37% or 43% (as now proposed by the Commission) for 2030 cannot be followed by the European steel industry which already decreased its emissions by about 50 % over the last five decades. The EU ETS should take account of the technical and economic feasibility of the climate objectives for each sector. For sectors exposed to fierce global competition such as the steel industry, the EU ETS should not result in additional costs at least at the level of the most CO2 efficient performers, unless competitors outside the EU are put under a similar regime. A global agreement on climate change which provides a level playing field for steel is therefore an indispensable condition for further ambitious climate targets. The ETS as presently constituted is not working. The balance between ambitious targets and protection of the competitivity of the foundation industries of Europe has been lost. The debate on a fundamental review of the EU ETS should be opened as soon as possible in the new legislature.

Clear rules in environmental policy

It is essential that laws and new regulations pay attention to the existing regulatory situation. An example is where the proposed Directive on medium-sized furnaces, overlaps with the already existing industrial emissions and with the Ecodesign Directive. This type of over-regulation must be strictly excluded. In addition, EU leaders must more than ever reflect on the principle of subsidiarity, as problems can often be better addressed locally than on an EU level. Examples are soil and groundwater protection, which do not move across borders.

Modernization of trade defense instruments

The steel industry is in favour of global trade under the auspices of the WTO. However free trade must be accompanied by fair trade. It is important that the EU's trade defense instruments restore effectively a level playing field. The European Parliament should continue to strongly support this. The Parliament must support the TDI modernisation proposals of the Commission.

Strengthen Europe's industrial base through support for research and development.

The strength of Europe is the innovative drive of its people and industries. The European steel industry is an essential part and the basis of many highly innovative value chains, such as automotive, construction, mechanical engineering, domestic appliances, and low-carbon energies.  To keep Europe at the top globally, continued EU support for R&D and the expansion of research networks is fundamental.

The European Union needs a coherent and sustainable industrial policy. Industrial policy and industrial competitiveness must carry the same weight as individual policies on climate and the environment. Only under these conditions, can the steel industry, closely intertwined with the history of the European Community, have a future in Europe.

The European Steel Association (EUROFER AISBL)

Avenue de Cortenbergh, 172
B-1000 Brussels

Tel.: +32 2 738 79 20
Fax.: +32 2 738 79 55