The Industrial Accelerator Act (IAA) proposal’s failure to include a “Made in Europe” mandate for steel means it will not generate the investment needed for the low-carbon transition of Europe’s steel industry, says Eurofer.
The European Commission confirmed in March its IAA legislative proposal includes a stipulation that 25% of steel volume procured for public projects launched from 2029 must be low-emission. However, given the forthcoming new steel trade regime, a “made in EU” requirement was not included.
“If Europe wants to decarbonise its steel industry, it must create demand for low-carbon steel made in Europe. Otherwise, the EU risks funding foreign production while weakening investment, jobs and industrial capacity at home,” Eurofer director general Axel Eggert says in a note sent to Kallanish.
Although steel in public procurement does not include an EU mandate, other industries do, including automotive, a large steel consumer.
“While CO2 credit schemes require steel of Union origin, this does not apply to vehicles purchased under public procurement and public schemes that require low-carbon steel. This risks market confusion and weakens the demand signal. Therefore, products that are classed as ‘Made in EU’ should also include a substantial minimum share of low-carbon steel of Union origin,” Eurofer notes.
Eurofer is also calling for a single, clear definition of Union origin, based on steel that is melted and poured in the EU, to ensure that public procurement and support schemes genuinely prioritise European production.
“A central concern is the lack of robust and consistent ‘Union origin’ rules. Under the current proposal, products labelled as ‘Made in EU’ could include steel produced outside the EU and only processed within Europe. As more than 75% of EU steel imports come from free trade agreement partners, products from nearly 80 countries could qualify for EU support schemes despite not being subject to comparable carbon costs leaving the European steel industry at a distinct disadvantage,” the association notes.
It is also seeking higher minimum shares of low-emission steel in public procurement and support schemes and a broader scope covering strategic sectors such as wind energy and electrical steel components.
Without these adjustments, the IAA risks shifting emissions and investment abroad, Eurofer asserts.
The European Economic and Social Committee (EESC) Employers’ Group concluded in a debate last week that substantial revisions are needed to the IAA. This is because it does not sufficiently guarantee demand for low-carbon industrial products produced in the EU, nor does it adequately address the cost gap associated with decarbonisation.
In its IAA impact assessment, the Commission noted that mandating low-emission steel use in the EU’s construction and automotive sectors would allow steel to gain a green premium that will be partially passed on to the price of final products. This could push further decarbonisation investment decisions.
Author: Adam Smith
