The Industrial Accelerator Act’s (IAA) “Made in Europe” requirement should be extended to steel to help support uptake from domestic DRI/HBI production being planned in the region, Kallanish learns from sources.
The European Commission confirmed in March that its IAA legislative proposal includes a stipulation of 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 Europe” requirement has not been included, and neither has the voluntary label for low-emission steel.
One source says the current situation reflects compromises reached in Brussels, noting that while “there is the green steel concept which is a good signal,” it does not yet include a strong “Made in Europe” component.
They describe the IAA as “a missed opportunity” although discussions are said to be still ongoing. “They say it’s not over, some negotiations are still happening, but some countries’ position was to not include a made in Europe steel for public procurement. We need to have a very clear Made in Europe criteria.”
While the current uptake of green steel remains sluggish, some segments are beginning to show signs of momentum. Industry sources say the European Commission is working on defining and labelling green steel, with many pushing for a simplified classification system.
Automotive and component manufacturers are beginning to drive demand pushed by the need to lower the carbon emissions of their European supply chain. Recent purchases of low-carbon steel by carmakers prove demand is growing. “They will need green steel in the future which implies increased demand for HBI as part of the low-carbon steel value chain,” the source says.
“If you want to preserve the industry that is struggling, you cannot work with the old model of making and selling steel, it’s not sustainable anymore. You need to reduce costs of electricity, you need to incentivise people to invest and you need to create demand for a true transformation to happen,” they add.
Another source questions how such a label would be defined in practice, asking “what is green steel? What is made in Europe? How far back along the value chain the definition should extend and will raw materials such as HBI be included?”. “A compromise in Brussels on public procurement rules remains necessary,” they add.
Regarding the potential impact of geopolitical tensions on future DRI/HBI projects, market participants express limited concern. Although current and future conflicts will be pushing up logistics and energy costs, the supply chains for green iron particularly from South America are expected to remain unaffected, thanks to the political stability of the Western Hemisphere.
