The European Commission (EC) has unveiled the final version of its Steel and Metals Action Plan to protect its steel and metals industry and to strengthen the industry’s competitiveness in the short and medium term.
The European Commission states in the plan that the steel industry is the foundation of Europe’s economy, providing inputs to critical industries such as automotive, clean tech and defense. Strengthening the steel and metals industry is also crucial to warrant security in the current geopolitical context. However, high energy costs, unfair global competition and the need to reduce emissions put enormous pressure on the steel industry.
In this context, within the scope of the plan, the EC will ease access to affordable energy. In order to achieve this, it will reduce network charges and energy taxes, facilitate power purchase agreements, accelerate permissions, expand and modernize grids, and promote tax flexibility to ease electricity price volatility. Also, the commission will allow faster grid access for energy-intensive industries and will support the increased use of renewable and low-carbon hydrogen within the industries.
Moreover, the EC will strengthen the Carbon Border Adjustment Mechanism (CBAM) to ensure a level playing field. Even though CBAM applies to import goods, it does not consider possible carbon leakage risks for goods produced in the EU for export to third countries. Thus, the EC will provide a solution to address this issue. In addition, it plans to extend the CBAM to certain downstream products and to introduce anti-circumvention measures for the CBAM.
Furthermore, since global steel overcapacity is a serious threat to the profitability and competitiveness of the steel industry, the EC will tighten its current safeguard measures. As a result, it will introduce a new long-term solution before the end of this year with the aim of protecting its steel industry once the current safeguard measures expire in June 2026. It will also assess the implementation of the “melted and poured rule” to trace the origin of the metal.
In the meantime, the commission plans to improve recycling in order to promote circularity. Thus, it will set targets for the use of recycled steel and aluminum in key industries. Additionally, it will assess the need for recyclability and/or recycled content requirements for other product groups such as construction materials and electronics. The EC will also consider introducing trade measures on metal scrap to ensure availability of scrap that is a significant input for the production of low-carbon steel.
Lastly, the EC will protect about 2.6 million indirect and direct jobs and workers’ rights in the steel and metals industry with active labor policies.
Dr. Henrik Adam, president of the European Steel Association (EUROFER), has applauded the plan, saying that concrete measures should be taken immediately to reverse the downturn of the steel industry. He pointed out that, despite the positive proposals, high energy prices remain the real issue. High energy prices affect not only steel and metals production, but they are also dragging down entire industrial value chains, he said. Mr. Adam added that further work to reduce energy costs is crucial.