Europe's 'Action Plan' to Rescue Steel Industry

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Commission (EC) has launched an action plan to help its struggling steel and metals industry.

The Steel and Metals Action Plan forms a key part of the European Union's (EU's) recently announced Clean Industrial Deal, a 100 billion-euro (US$105 billion) funding plan to boost support for energy-hungry industries that face "high energy costs and fierce and often unfair global competition." For additional information, see March 11, 2025, article - EU Reveals $105 Billion Clean Industrial Deal. The plan sets out measures it will enact to protect the industry from U.S. tariffs and make it more competitive globally against U.S. and Chinese rivals. The steel and metals industries support 2.6 million people, directly and indirectly, the Commission noted.

The actions will include seeking to reduce energy costs for power intensive industries through the use of power purchase agreements (PPAs), energy tax breaks and faster grid access. To prevent "carbon leakage" the Commission plans to simplify and strengthen the Carbon Border Adjustment Mechanism (CBAM), which adds a price to imported goods, like steel, based on carbon emitted during production in an effort to stop price undercutting. CBAM has been heavily criticized by Europe's heavy industries as not doing enough to stop "greenwashing," where metals from non-EU suppliers are presented as low-carbon while still relying on high-emission energy sources. To combat the issue of global overcapacities, the Commission will tighten the current steel safeguards by proposing a new long-term measure to maintain highly effective protection of the EU's steel sector from mid-2026. To stop exporters from bypassing trade defence measures, the Commission will also assess the introduction of the "melted and poured rule" to determine the origin of metal goods. It means the origin will be where the metal is originally melted, not where it ends up for further minimal processing, a practice that allows suppliers to evade EU dumping duties and other levies. Other actions will include de-risking decarbonisation through greater financial support and creating more "circularity" by setting targets for recycled steel and aluminium in key sectors and assessing whether more products, like construction materials and electronics, should have recycling or recycled content requirements. Additionally, it will consider trade measures on metal scrap, which it called "a vital input for decarbonised steel."

"The steel industry has always been a core engine for European prosperity," said Ursula von der Leyen, president of the European Commission. "Next-generation, clean steel should therefore continue to be manufactured in Europe. That means we have to help our steelmakers who are facing strong headwinds on the global market. To make sure they remain competitive, we must reduce energy costs and help them introduce innovative, low-carbon technologies to the market. With today's Action Plan we are offering concrete solutions for a thriving European steel industry." The Action Plan arrives hot on the heels of the EU retaliating to U.S. trade tariffs on its steel and aluminum industries with a series of countermeasures that will impact up to 26 billion euro worth (US$28.4 billion) of U.S. goods. For additional information, see March 24, 2025, article--Europe Hits Back with $28 Billion of Tariffs Against U.S..

The Plan was met by broad support across the industry. The European Steel Association (EUROFER) welcomed the proposals but stressed that swift implementation will be crucial. "With today's Steel and Metals Action Plan, the European Commission is sending a clear message: a strong European Union needs a strong European steel industry," said Henrik Adam, president of EUROFER. "From addressing unfair trade to closing loopholes in the Carbon Border Adjustment Mechanism to recognizing the strategic and environmental value of steel scrap, the Action Plan identifies crucial areas for our sector. Now it's time to implement meaningful solutions through ambitious measures." Steel major thyssenkrupp (Essen, Germany) called the plan a "groundbreaking step." Dennis Grimm, spokesperson for the Executive Board of thyssenkrupp Steel added: "It must be clear to everyone that the combination of massive global overcapacity, inadequate trade protection, excessively high energy prices, and the challenges of transformation are endangering the very substance of our industry. Last year alone, nine million metric tons of capacity were shut down in Europe. The Steel Action Plan represents a pioneering step toward securing the competitiveness and decarbonization of the European steel industry. Particularly noteworthy is the clear prioritization of trade protection, which is crucial for securing the competitiveness of the European steel industry. What matters now is consistency and speed in putting it into effect. There is no time to lose."

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