Day: 9 July 2025

This article is part of a series on steel distribution association EUROMETAL’s 75th Anniversary conference 2-3 July, discussing challenges and opportunities for the sector from its policy background; trade protection; the Carbon Border Adjustment Mechanism; green steel; and the evolving role of European steel distribution.

“Climate change will dictate not just what happens in our industry, but in every industry,” said World Steel Association Director General, Edwin Basson, at EUROMETAL’s 75th anniversary event.

Indeed green steel, and its place in the wider decarbonisation of the world’s industries was at the forefront of discussions at the conference, especially as the European steel sector ends a time of transition, proceeding toward financial accountability for its sustainability goals.

However, as the steel industry attempts to meet ambitious sustainability targets, distributors continue to lack an official definition or coherent regulatory framework for green steel, limiting their potential to create or assess demand for decarbonised products, and sustaining stockholder reluctance to trade green steel without a customer lined up in advance.

Transparency opportunities

While many distributors prefer to wait for legislative guidance to generate lead markets for green steel, such as the Industrial Decarbonisation Accelerator Act scheduled for later this year under the European Steel and Metals Action Plan, some distributors are already identifying and capitalising on new opportunities afforded by the industrial transition, like Klockner CEO, Guido Kerkhoff.

In one of the day’s most interesting presentations, Kerkhoff demonstrated how Klockner’s approach to green steel marketing, focussing on Product Carbon Footprints (PCF), could be embedded into distributors’ procurement and data services, cleanly illustrating the value of green steel to consumers.

Emphasising the relative affordability of steel in comparison to other products, Kerkhoff showed that steel – in its ubiquity – premised near unparalleled reductions in the embedded emissions content of end-products at minimal cost, attracting value-generating demand for distributors by making transparent to consumers the benefits of adopting green steel over other decarbonisation routes in their supply chains.

“Sure, steel is a big part of the climate problem,” Kerkhoff said – “but I believe it is a much bigger part of the solution.”

Dr Henrik Adam, President of Eurofer, argued similarly in his own presentation, stating that “steel is not bad per se – instead it is highlighted as it is by far the most used engineering material.”

In his presentation, Kerkhoff said that Klockner’s data services found the majority of their customers could be afforded a 25% reduction in their embedded emissions “today” at a “negligible price premium,” seeing the stimulation of green steel demand as the responsibility of not just regulators, but distributors too.

For example, when looking at a passenger vehicle, Kerkhoff cited that switching to green steel from traditional steel – which accounts for 23% of total emissions of the car – would only result in a 0.7% increase in the end-product price. This was similarly evidenced for white goods, like washing machines – with steel emissions’ share at 25% and a 3.6% end-price increase; for onshore projects at 70% and 3.4%; and for offshore infrastructure at an 83% emissions share for steel against a 5.5% end-price increase on green steel inputs.

Kerkhoff was also keen to differentiate structurally between the green steel and traditional steel markets, arguing that while overcapacity continues to depress the traditional steel markets, a well-supported green steel market in Europe would actually fall into undercapacity – potentially creating strong opportunities for prepared distributors in both in terms of end-consumer demand, and import sourcing.

When challenged on whether the transparency-based PCF approach was too burdensome on the distribution sector amid regulatory ambiguities, Kerkhoff colourfully dismissed these arguments as “bulls**t:”

“At the end of the day, we must remember that steel is cheap, and that we do not produce a single ton of it ourselves,” Kerkhoff addressed his distribution colleagues. “We can and have certified everything – it absolutely can be done. It took a while, sure, but the financial cost was relatively minimal,” he confirmed.

“I believe distribution has more opportunities through transparency than we believe,” Kerkhoff said. ”There is no cheaper way – steel, in a majority of products, is by far the most affordable option to reduce total emissions.”

Cosmin Bakai, global purchasing manager of automotive OEM Autoliv, described a “dominance” of Europe in “non-greenwashed PCF green steel.” He argued that sourcing from Europe could still be competitive when accounting for logistical factors, but that European producers and regulators would have to take care not to undermine this potential against aggressive strategies from exporters like China.

Regulatory ambiguities

Antonio Marcegaglia, CEO of Marcegaglia later addressed Kerkhoff’s presentation, stating that while he acknowledged “the point that [distribution] could participate more directly in the decarbonisation of the industry – the mechanisms of protection are too confused.”

This is not a point to be dismissed lightly, as while a PCF approach does allow carbon reductions to be illustrated to consumers, new definitions or changing policies as to what constitutes green steel threaten to massively devalue material held by stockholders if it is not deemed applicable to official decarbonisation targets.

While not addressed by conference speakers explicitly, McCloskey’s discussions on the sidelines identified the Low Emissions Steel Standard (LESS) as increasingly dominant as a potential standard for green steel classification. LESS takes a site-level rather than a product-level assessment in defining to what extent a steel product is authentically decarbonised, incorporating a sliding scale that lessens the value of carbon reductions the greater the constituent share of scrap steel in its production.

As noted by multiple speakers, scrap steel availability is fundamentally tied to historic production levels and an average steel lifecycle of 40 years. Attendees expected that Europe may see a decoupling of ironmaking and steelmaking, importing hydrogen or natural gas produced direct-reduced iron (DRI) from regions with more competitive natural gas or renewable energy balances.

European authorities have recently passed new supportive mechanisms to protect European competitiveness, such as the Clean Industrial Deal State Aid Framework (CISAF) and consultations to simplify and embed export rebates into the Carbon Border Adjustment Mechanism (CBAM). Yet, as was a common theme at the conference, market stakeholders have little confidence that policymakers will be able to design legislation that properly appreciates the nuance of physical trading and manufacturing. Marcegaglia specifically criticised recent energy subsidy proposals that incorporate far-reaching claw back mechanisms, making it “almost impossible” to assess financial exposure and optimal business strategies.

“Protectionism cannot be the only answer, we cannot allow European industry to be overly isolated,” Marcegaglia said.

Much of the green steel debate centered around how far Europe should erect trade barriers to protect against deindustrialisation, with overprotection viewed as potentially isolating European exporters from global supply chains. It was suggested that European industries should become better integrated at a supranational level, such as positioning renewable energy infrastructure in the member states best-suited for renewables generation, and ensuring interoperable deployment of national industrial support mechanisms.

Eurofer’s Dr Adam also warned against relying too heavily on single paths to steel sustainability, stating that Europe “should not put all its eggs into one basket.

“[Carbon Capture Systems] were preferred, until their death,” Adam said, “but why can we not use and be credited for these strategies for the mid-term?”

European steelmakers are already postponing or cancelling their decarbonisation projects on the basis of a lack of economic viability, including the immaturity of dependent markets like green hydrogen or direct-reduced ironmaking. Many of the projects promising green steel production globally are still in their infancy, meaning distributors lack insight into both the realities of future green steel products, and how these products will be accounted under different decarbonisation frameworks.

“Of course, we should be a leader in decarbonisation,” said Marcegaglia, “but to have only recently incorporated discussions on competitiveness is completely absurd. Why are we, as Europe, listing what industries we should protect? Every industry should be protected!”

Certainly, while attendees at the conference had much to disagree on, one point of unanimous agreement was that the steel industry’s decarbonisation targets – and by extension the EU’s as a whole – would not be met in time, though this perceived slowing in progress was not once used to argue an abandonment of sustainability as a whole.

“More than anything, young people believe in decarbonisation, so it is definitely coming,” said Julian Verden, Managing Director of STEMCOR. “We’re all going to need to invest in it little by little to ensure it happens for them.”

Eurofer’s Dr Adam illustrated the other side of the coin: “we must ensure with our own hands, that our grandchildren have jobs that are not just counting money –  or pouring beers.”

Benjamin Steven Journalist, Steel

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