A thriving European steel industry is crucial for the EU’s strategic autonomy and resilience. However, over the past decade, the EU has shifted from being a net steel exporter to a major net steel importer, losing 30 million tonnes of sales on the EU and export markets. Additionally, the EU steel industry has lost 26 million tonnes of steel production capacity and 25% of its workforce.
The EU is facing a new global reality. To ensure that the EU remains competitive in the middle of the greatest transformation of the industry towards climate-neutrality, it is essential to adopt disruptive thinking and innovative measures. Otherwise, competitors such as the US and China are likely to create a more attractive investment and production environment for green steel, further threatening the EU’s strategic autonomy. The US Inflation Reduction Act (IRA) alone will provide at least USD 85 billion of funding for steel production and upstream energy requirements.
Steel is essential for a climate-neutral economy. Renewables, hydrogen, wind and electric vehicles, are all dependent on steel. It is estimated that more than 74 million tons of steel will be required for the expansion of renewable energy generation alone, demonstrating that the foundations of the Net-zero Age are made of steel. A successful EU industrial policy requires a value chain-based approach, with steel at the core of the Green Deal Industry Plan and as an integral part of the Net-Zero Industry Act. To transition steel and other energy-intensive industries towards carbon neutrality and enhance circularity while ensuring the EU industry’s competitiveness is protected, the following enabling conditions are indispensable:
1. Access to sufficient and globally cost-competitive fossil-free energy and primary and secondary raw materials such as steel scrap, which is strategic.
2. Better tailored, more certain, clear and flexible funding and financial incentives across the EU are required, as well as faster processing of applications. Increased support for the roll-out of low-carbon steel projects rather than for research and innovation is necessary.
3. Establishment of lead markets for green steel and products (including low-CO2 steel); this could be achieved through public procurement, quotas, ambitious GHG thresholds or introduction of GHG pricing for final products based on their lifecycle emissions.
4. Trade policy that levels the playing field with global competitors:
It is also essential to prioritise and mainstream industrial policy and competitiveness while reducing regulatory burdens in all policy initiatives and legislative proposals, ensuring long-term predictability.
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Brussels, 07 December 2023 – The inclusion of transformative industrial technologies for the decarbonisation of energy-intensive sectors, such as steel, in the list of net-zero technologies in the general approach adopted by the Council on the Net Zero Industry Act (NZIA), sends a positive signal at a crucial time when governments are deliberating urgent measures to protect the climate at COP28 in Dubai. Parliament and Council should now seize the opportunity to reach an ambitious agreement to promote EU-made green products in public auctions of net-zero technologies and to drive Carbon Capture, Usage and Storage (CCUS) in Europe. Promoting lead markets and CCUS are essential tools for sustaining the transition to low-carbon steelmaking, says the European Steel Association.
Brussels, 01 December 2023 – Further delays in implementing EU sanctions against Russian steel semifinished products would have a perverse effect, ultimately fuelling Putin’s war machine against Ukraine. The EU Council should reject additional exemption requests from a few member states defending the lucrative business model of few steel rerollers. The trade dynamic that takes advantage of cheap steel imported from Russia while aiding the supply to its military and related downstream sectors must come to an end, states the European Steel Association.
Industriall & EUROFER joint statement