Europe is lacking regulatory frameworks and demand-side policies to support decarbonisation and uptake of green metals, while clarity over definition remains missing, delaying project investments, panellists said at the Kallanish Green Steel Strategies event in Brussels.
Åsa Ekdahl, head of environment and climate change at the World Steel Association, told delegates: “There are quite a lot of policy developments on the supply side but very little on the demand side”, adding that not enough was being done.
“Governments are thinking about how to increase demand, [such as with] CBAM, the new contract for difference policy in Germany, initiatives around public procurement, but it’s moving quite slowly,” she added.
Ekdahl also noted that demand for low-emission steel is coming from the private sector, especially premium brands, with some movement in the automotive industry, but very little within the construction sector.
Stephane Tondo, head of climate change at ArcelorMittal, agreed that “demand is the elephant in the room; this hasn’t been tackled at all by the policymakers.”
“We have seen some policies emerging in green public procurement … in construction and wind. But unlike concrete where public procurement is 50% of their turnover, in steel it’s 5% in flats and 10% in longs. This will not trigger an investment, for 5% of your business,” he asserted.
He added that before investment could be decided, Europe would need to fix the conditions on trade, CBAM, energy, and lead markets.
“When we build a strategy, it cannot be a global strategy. We know what to do in India for the Indian market, we know what to do in America for the American market, we don’t know what to do in Europe because the clarity is not there,” Tondo noted.
Erik van Doezum, head of metals, mining and fertilizers at ING Bank, echoed this lack of regulation.
“The steel industry does not exist in a vacuum; this is about the full European industrial supply chain. Where it seems to be clear to me that the EU hasn’t been able over the past decade to put forward a regulatory framework which encourages innovation and investments and development of industrial landscape,” he said.
Meanwhile Anna Pekala, market director green energy transition at Ramboll, also noted challenges including cost competitiveness.
“Problems on the demand side [are] we see a lack of incentivises and willingness to pay for the green products,” she observed.
On hydrogen, she sees lacking regulatory incentives and clarity, as well as delays in policy being implemented, resulting in project delays and investors being unable to commit and provide funding.
“We see a lot of push on the producer side; the question is, will there be enough decarbonising measures to actually decarbonise the market?” she added.
Ekdahl also pointed to the lack of global standard for green steel as being a barrier, with worldsteel seeking to address this through ongoing work with members, to streamline these approaches together.
Tondo echoed this lack of standards for other markets such as carbon.
“We all dream there’s one global carbon market, as it would give stability … Today it’s not the case, we have different systems emerging. There is no harmonised system at all,” he said.
Meanwhile, Henrik Adam, vice president of European corporate affairs at Tata Steel and president of Eurofer, urged the EU to utilise income from existing measures to support the industry.
“Today, the income from CO2 is by no means flying back into decarbonisation,” he said. “If we used the income from ETS, CO2, CBAM, to decarbonise our industry, it would be a great thing.”
Carrie Bone UK
