In the shadow of war, six European nations signed the Treaty of Paris in 1951, driven by the understanding that industrial strength, economic prosperity and political stability were inseparable. By creating a common market for coal and steel, Europe’s founders recognised that these strategic industries could not be left entirely to geopolitics and markets. Steel was viewed as the foundation upon which Europe’s recovery, security and future would depend.

Seventy-five years later, that lesson has returned with force.

Europe faces a defining challenge: how to remain globally competitive while leading the transition to climate neutrality at a time when the global economy is becoming more fragmented and more protectionist. Across the world, industrial policy has returned to the centre of economic strategy. Governments are intervening to secure supply chains, protect strategic sectors and accelerate domestic industrial investment. Trade defence measures are growing. Economic openness now coexists with geopolitical and industrial competition.

No sector illustrates the stakes more clearly than steel.

Steel remains fundamental to Europe’s infrastructure, defence, transport, automotive sector and clean energy technologies. There is no credible path to climate neutrality without it. Every wind turbine, electricity grid, railway and electric vehicle depends upon steel. Preserving the steel industry is therefore not only an industrial objective, but a necessity for Europe’s long-term security, resilience and technological capability.

And yet, for too long, Europe’s steel industry has faced existential pressure.

Global steel overcapacity now exceeds 650 million tonnes. Steel imports into the EU reached historically high levels in 2025, placing unprecedented pressure on the European market and with import penetration reaching up to one-third of apparent EU steel consumption. At the same time, the United States has imposed tariffs of 50% on European steel exports, underlining how trade has become a tool of geopolitical competition.

Europe’s producers are therefore competing in a market that is neither open nor balanced. While other major economies shield their industries and subsidise industrial transformation, European steelmakers are being asked to deliver one of the most ambitious decarbonisation transitions ever attempted while facing some of the highest energy costs in the world. Billions are rightly being invested into electrification and low-carbon technologies, yet producers must compete against imports manufactured under lower environmental standards, lower energy costs and weaker regulatory obligations.

“Europe cannot afford to sleepwalk into the decline of one of its most strategic industries while its global competitors defend and expand theirs.”

The European Commission’s Steel and Metals Action Plan published last year is therefore both welcome and overdue. Europe has recognised that preserving industrial capacity is not protectionism, but strategic necessity. The new trade measure, the strengthening of safeguards, the implementation of the Carbon Border Adjustment Mechanism (CBAM) and growing attention to secure scrap supply chains all reflect a marked shift in European thinking.

Together, these measures can help revive European steel production while supporting tens of thousands of direct and indirect industrial jobs across Europe. This is not about closing Europe’s markets. It is about preserving Europe’s industrial base, securing viable steel production capacities and ensuring that decarbonisation remains econo- mically achievable inside Europe rather than outsourced beyond its borders.

But these measures must now deliver in practice.

If CBAM stops at steel while downstream products remain exposed, carbon leakage will simply relocate further down the manufacturing value chain. The same strategic approach must extend across steel-intensive downstream sectors to preserve demand for European steel. Furthermore, if Europe allows scrap exports to accelerate unchecked, it risks exporting the very raw materials needed for its own circular transition. And if energy costs remain uncompetitive, no industrial strategy will succeed regardless of climate ambition.

The challenge now is to create the conditions for competitive decarbonisation at scale. Europe must urgently address industrial energy prices. At the same time, Europe must accelerate the creation of lead markets for low-carbon steel. If European industry is expected to invest in clean production technologies, it must also have markets capable of ensuring a genuine business case for those investments.

Seventy-five years ago, Europe understood that industrial cooperation was essential to prosperity and stability. The next chapter of Europe’s industrial story must now be about ensuring that it not only regulates, but produces, competes and leads. Industrial policy must be anchored in both Europe’s competitiveness and decarbonisation agenda.

“Europe must create the conditions that allow industry to invest, innovate and decarbonise with confidence or risk losing the very industrial foundations upon which its prosperity was built.”