News » EU technical report on production costs from the iron and steel industry in the EU and third countries
EU technical report on production costs from the iron and steel industry in the EU and third countries
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The report is a technical study on the production costs in the iron and steel industry in the EU and third countries.The cost breakdowns are provided for two typical products of the integrated and recycling routes.
The report looks at data from the EU and ten other countries and uses data from around 150 facilities globally. The report's abstract says the following:
This report provides an overview of the production costs in the iron and steel industry in the EU and third countries. The cost breakdowns are provided for two typical products of the integrated and recycling routes (hot rolled coil as a proxy of flat products and wire rod as a proxy of long products). The analysis includes detailed information from 153 production facilities in the EU27 and 10 other countries (Russia, Turkey, United States, United Kingdom, Ukraine, China, India, Japan, South Korea and Brazil). The information is based on data from October 2019. This is the last available data before the COVID-19 pandemic affected the iron and steel industry. The results show that the EU27 has the third-highest production costs for hot rolled coil via the integrated route (458 EUR/t). The main contributors to these costs are the raw material costs 65%, the ‘other costs’ 27% and energy costs 17%. The CO2 cost is included in ‘other costs’ and for the EU27 represents 2% of the total production costs. It is worth noting that the EU27 is among the world leaders in creating credits from recycling materials and energy. This shows a high optimisation of the integrated route processes in the European steel industry, as a result of cumulated investments in innovations over the years. The results also show that the EU27 has the second-highest production costs for hot rolled coil via the recycling route, which is however only 6% higher than the lowest production cost of all the countries in the analysis. Finally, for the production of wire rod, the EU27 production costs are either the highest (when produced via the integrated route) or second-highest (when produced via the recycling route). The materials cost in the EU27 is 68% and 58% of the production costs, for each of the two respective production routes. These shares for the material cost are similar in the rest of the countries. The share of the energy costs in the EU in wire rod production in the integrated route is 11%. This is close to the minimum observed share. In the recycling route, 20% is the highest share observed in any of the countries considered.
The JRC technical report is available at the links in the downloads box below.
Brussels, 15 July 2021 – The Fit for 55 package, released yesterday by the European Commission, needs a more finely balanced approach to enable the decarbonisation of EU steel industry whilst avoiding the leakage of production and CO2 emissions outside the EU.
Brussels, 12 July 2021 – The European Commission is expected to put forward its Fit for 55 package of climate and energy policy measures on 14 July 2021. The Fit for 55 package is one of the most significant - and largest - groups of measures the EU has ever released in one go. It will completely revise the basis of EU climate and energy policy in attempt to bring it into line with the EU's political ambition.
The Fit for 55 package is one of the most significant - and largest - groups of measures the EU has ever released in one go.