The European Commission has unveiled a comprehensive Action Plan aimed at boosting and protecting the European steel industry. With challenges such as global overcapacity, rising energy costs, new U.S. tariffs, and trade diversion, the EU’s swift response underscores the urgency of the situation.
Key Measures in the EU Plan
Energy Supply Security and Affordability:
The EU plans to promote Power Purchase Agreements (PPAs) and encourage member states to use energy tax flexibility and reduced network tariffs. These measures aim to reduce electricity price volatility. Additionally, the EU will facilitate faster grid access for energy-intensive industries (EIIs) and support the adoption of renewable and low-carbon hydrogen.
Preventing Carbon Leakage:
The EU will implement the Carbon Border Adjustment Mechanism (CBAM) to ensure non-EU industries do not falsely claim low-carbon status while relying on high-emission energy sources.
Protecting European Industrial Capacities:
The Commission will tighten existing steel safeguards. By the end of 2026, a new long-term measure will be proposed after the current safeguard expires. The EU will also explore the “melted and poured rule” to better track the origin of metal products.
Promoting Circularity:
The EU plans to set targets for recycled steel usage in key sectors and assess whether more products should have recycling or recycled content requirements. The Commission will also evaluate trade measures on metal scrap.
Decarbonization Support:
The Commission will allocate €150 million through the Research Fund for Coal and Steel in 2026-2027 and an additional €600 million via Horizon Europe for the Clean Industrial Deal. A targeted €100 billion will be allocated through the Industrial Decarbonisation Bank, with a €1 billion pilot auction in 2025 focused on decarbonizing key industrial processes.
Protecting Quality Jobs:
The European Fair Transition Observatory and the Quality Jobs Roadmap will ensure the protection of workers’ rights amid the transition to a greener economy.
Critical Opportunity for the UK
Many of the EU’s new policies align with proposals already presented by UK Steel to the UK Government. As the UK Steel Strategy continues to develop, now is a crucial time for the UK Government to act. The UK should introduce new measures, such as strengthening steel safeguard quotas, to ensure it doesn’t fall behind the EU.
Gareth Stace, Director General of UK Steel, emphasized the urgency of the situation, stating, “The speed and ambition of Ursula von der Leyen’s Steel Action Plan shows what’s possible when governments act decisively. The UK Government should take note. The EU Commission’s plan addresses challenges facing UK steel, including high energy prices, trade defences, securing critical raw materials, a stronger CBAM, and prioritizing domestic steel in procurement.”
Stace stressed that while a long-term Steel Strategy is essential, immediate action is needed. He added, “UK Steel has presented clear solutions to reverse our decline. It’s time to deliver competitive energy prices, tighten safeguards against imports, and ensure British-made steel is used in publicly-funded projects.”
He concluded, “The EU has set out a bold and urgent vision for its steel sector. The UK Government must match that ambition and act quickly to secure the future of our industry before it is too late.”
