Brussels – On March 19, the European Commission presented a six-point strategy aimed at revitalizing the beleaguered European steel industry, which has experienced significant declines in production and job losses over the past decade.

The initiative includes enhanced restrictions on imports from non-EU countries and measures to combat unfair trade practices, while promoting low-carbon technologies and setting ambitious recycling targets for ferrous scrap.

Industry data shows that the European steel sector has lost nearly 100,000 jobs since 2009. Production levels have fallen from 160 million tons in 2017 to 126 million tons in 2023. European Commission President Ursula von der Leyen emphasized the need to support domestic steel producers who face substantial challenges in the global marketplace.

The newly unveiled action plan reflects the outcome of a Strategic Dialogue on steel, involving consultations with industry associations and key stakeholders.

It identifies critical areas requiring attention, including the closure of loopholes in the carbon adjustment mechanism at European borders and the recognition of the strategic and environmental importance of steel scrap.

Henrik Adam, president of the European Steel Association (Eurofer), acknowledged the action plan while highlighting the persistent issue of elevated energy prices as a major concern for the industry.

Energy costs, which significantly impact the production of metals, accounted for 17 percent of steel production costs prior to the energy crisis and soared to 80 percent during the 2022 energy crisis.

Currently, European industries are facing energy bills that are three times higher than those of their International competitors.

The European Commission is looking at hydrogen as a potential alternative energy source, in line with its Clean Industrial Deal.

This approach will include the publication of a delegated act to facilitate an adequate supply of renewable and low-carbon hydrogen, potentially derived from nuclear power.

To further shield European industry from unfair competition, the action plan proposes the establishment of a long-term safeguard clause by the end of the year.

This clause aims to cap imports of hot-rolled steel from certain nations in relation to total EU demand.

Currently, the European steel and aluminum sectors are subject to 25 percent import tariffs imposed by the previous U.S. administration, which the Commission warns may adversely affect EU producers by limiting their market access and increasing competitive pressures from redirected exports.

Additionally, the plan includes intentions to revise the Carbon Border Adjustment Mechanism (CBAM) by year-end.

This revision aims to prevent non-European industries from falsely positioning their metals as low-carbon while continuing to utilize high-emission energy sources.

The Commission aims to ensure compatibility with World Trade Organization regulations.

The promotion of recycling is another key facet of the action plan, which emphasizes its role in reducing emissions and energy consumption within the metals industry.

Estimates suggest that recycling can save up to 95 percent and 80 percent of the energy required for producing aluminum and steel, respectively.

The Commission plans to set targets for recycled content in essential sectors and evaluate the potential for recycling requirements in other industries, including construction and electronics.

Environmental organizations, including several European NGOs, have criticized the plan for lacking necessary benchmarks, targets, and concrete actions, arguing that a more robust strategy is required to transition away from pollution-heavy production methods and to enhance recycling targets while ensuring worker equity during the transition.