The industry is currently facing high energy prices and global overcapacity

Ensuring favorable conditions for the decarbonization of the steel sector should be a priority for the EU. Green steel produced in Europe plays a strategic role as it helps create a zero-emission economy. This was stated by the European Steel Association (EUROFER) during the Dialogue on the Clean Transition in Steel.

According to the industry association, in 2023, the lowest level of steel production in Europe in history was recorded, and a number of plants were idle, which led to negative consequences for employees.

«Ensuring the enabling conditions for the short-term viability and the decarbonisation of the steel sector urgently needs to be at the top of the EU agenda,» EUROFER said.

According to EUROFER Director General Axel Eggert, over the past few years, the bloc and member states have launched a number of initiatives to support the transition of European industry to carbon neutrality. However, there are bottlenecks and these issues remain unresolved. These include the supply of low-carbon energy at internationally competitive prices, the creation of leading markets for European green steel, and measures to overcome excess capacity with high emissions on the global market. Therefore, the association calls on politicians to take swift action to preserve steel production in the EU.

The European steel industry is a global leader in decarbonization, with approximately 60 low-carbon projects out of 80 planned worldwide. However, capital investment needs amount to €31 billion and operating costs are €54 billion. The EU steel industry’s leadership is threatened by energy prices that are 4-6 times higher than those paid by European competitors, global non-market overcapacity, government subsidies, unfair trade practices, and unequal climate ambitions.

The EBA reminded that, as stated in the sectoral manifesto for 2024-2029, there are five areas of action that the EU should focus on to streamline its common green industrial policy. In particular, these include promoting access to non-fossil energy with a priority on hydrogen in the sectors that provide the greatest CO2 emission reductions; implementing an effective CBAM and strong trade policy; and ensuring access to critical raw materials, including scrap, for the transition period.

Decarbonization of the steel industry, according to Fastmarkets, will continue to be a key topic in 2024. Adequate supplies of clean hydrogen and renewable energy at competitive prices will be crucial in this process.