There is strong political will to support the steel industry in Europe, for the first time, Henrik Adam, executive chairman of Tata Steel Netherlands Holding BV, told delegates at Kallanish Europe Steel Markets in Amsterdam on Wednesday.
The state of the US steel industry shows there is hope for the steel industry if governments are willing to take decisive action, added Adam, who is also Eurofer president.
In order to avoid deindustrialisation, not only in the steel industry but also for its downstream manufacturing customers, problems with the Carbon Border Adjustment Mechanism (CBAM) must be addressed, Adam warned. The system in its current form has holes that “you could put a train through”, he remarked.
In particular, CBAM must also cover derivative products made with steel. Otherwise, these products could simply be made in other regions without paying carbon costs and EU manufacturers would be unable to compete.
The current crisis in the EU steel industry has been driven by high costs, including carbon costs. There have been 29 million tonnes/year of permanent capacity closures and 90,000 jobs lost over 2008-2023.
To pull out of this crisis, the EU must address trade, CBAM, energy and scrap issues. This is particularly true considering the more than 700m t/y of global steelmaking overcapacity. For energy, accessible, abundant, and affordable fossil-free electricity is needed, Adam added.
Over 2010-2020, the industry needed around 75 TWh/y of electricity. By 2030 this could rise to 165 TWh/y, and by 2050 400 TWh/y will be needed. Of this, 170 TWh/y would be used in steelmaking and 230 TWh/y would be needed to produce 5.5m t/y of hydrogen.
Especially since the energy crisis of the last three years, European gas and electricity prices are far above those paid in competing steelmaking regions.
Despite the deep crisis of the EU steel industry, there is hope that strong action can revive its fortunes. Although Adam does not agree with the methods that have been used in the USA, decisive action there has led to a sharp increase in capacity utilisation and investment.
EU capacity fell to 95% of 2010 capacity by 2019 and has since slumped to 86% of 2010 capacity. US capacity also fell to 94% of 2010 levels by 2019, but then rebounded to 101% in 2024, Adam noted.
