Ecomondo 2025: European steel industry between climate challenge and economic sustainability
Decarbonization, energy and raw materials were at the heart of debates in Rimini at Ecomondo 2025, a leading international event dedicated to the green and circular economy.
Participants heard that the race toward low-emission steel continues, but challenges remain over costs, technology and regulatory stability.
The transformation of the European steel industry toward low-CO₂ production represents one of the most complex turning points in the continent’s industrial transition. During one of the conferences held at Ecomondo 2025, experts, analysts and industry representatives reviewed the progress toward a decarbonized steel sector, discussing its challenges, targets, and economic implications. Producing green steel means not only reducing environmental impact, but also fundamentally rethinking the entire production framework – from technology and energy supply to financial and market models.
The global map of decarbonization
The discussion highlighted how the race toward climate neutrality has now become a global process. More than 80 percent of the world’s steel production comes from countries that have already set net-zero targets, with Europe and East Asia taking a leading role. The European Union aims for carbon neutrality by 2050, while the United States, Japan and South Korea have adopted similar goals. China and India, which together account for well over half of global steel output, are expanding their carbon markets and introducing policies to define so-called Green Steel classifications.
Only Russia and Iran currently remain outside this shared decarbonization path.
Technology, energy and raw materials – the three critical pillars
The ecological transition of the steel industry requires a deep technological overhaul. Fully carbon-free solutions have not yet reached industrial maturity, and production costs remain significantly higher than those of traditional processes.
Replacing blast furnaces with electric arc furnaces will also lead to a sharp rise in electricity demand – energy that must be both renewable and cost-competitive. At the same time, developing a green hydrogen supply chain, intended to replace natural gas in thermal processes, is essential, though still far from full-scale deployment.
On the raw materials side, the availability of high-grade iron ore and high-quality scrap remains limited. This could intensify competition for resources and widen the price gap between conventional and low-emission steels.
Investments and regulation – transition needs stability
According to the analyses presented during the event, full decarbonization of the European steel industry will require investments estimated between €60 billion and €85 billion. It is an enormous commitment for a sector that, after years of weak margins and stagnant demand, must now finance the most extensive technological transformation in its history.
Speakers also stressed the need for a stable and coherent regulatory framework. The rapid evolution of EU rules on the Emissions Trading System (ETS) and carbon accounting risks creating uncertainty in a sector where investment cycles span several decades.
Recycling and circularity – a tangible contribution
Within the path to climate neutrality, steel recycling remains an immediate and scalable tool.
Data presented in Rimini confirmed that the steel packaging recovery in Italy has already generated significant environmental and economic benefits, with more than €1.4 billion worth of recovered material and over 500 million kilograms of CO₂ avoided between 2000 and 2024.
These results show how a circular steel industry can directly contribute to emission-reduction goals by lowering dependence on primary raw materials and maximizing the value of resources already within the production cycle.
Toward a more sustainable European steel industry
The decarbonization of Europe’s steel sector is clearly underway but remains riddled with uncertainties.
The transition requires a delicate balance between technological innovation, economic sustainability, and regulatory coherence.
As emphasized during the discussions at Ecomondo, the goal is not only to produce zero-emission steel, but to build an industrial model capable of remaining competitive in the long term – one that reconciles growth, environmental responsibility and energy security.
Germany to halve grid fees in 2026, but steelmakers demand permanent solutions
Germany’s four transmission system operators have released preliminary nationwide grid fees for 2026, showing that grid charges will be halved thanks to a planned €6.5 billion federal subsidy. The measure will be financed through the Climate and Transformation Fund and is currently awaiting parliamentary approval.
Under the proposal, the average grid fee will fall from 6.65 ct/kWh to 2.86 ct/kWh. The government hopes this temporary subsidy will alleviate some of the energy-cost pressures weighing on energy-intensive industries, including steelmaking.
Steel industry welcomes the move but warns of short-term fix
The German Steel Federation (WV Stahl) has described the planned reduction as “urgently needed and long overdue relief.” Managing director Kerstin Maria Rippel emphasized that soaring grid fees over the past two years have severely hurt the industry’s international competitiveness, coming at a time when mills are struggling with high energy costs, global overcapacity, and weak domestic demand.
German steel producers have experienced a 130 percent surge in transmission fees since 2023, adding roughly €300 million per year in extra costs. These grid fees are compounded by wholesale electricity prices that remain well above levels in other major steel-producing countries, such as France or the US.
WV Stahl argues that, while the 2026 subsidy is a necessary step, limiting the measure to a single year fails to provide the stability needed for industrial investment decisions.
Industry calls for long-term planning security
The federation has urged lawmakers to extend grid fee relief beyond 2026. Year-by-year political decisions, it warns, create uncertainty that deters capital investment, particularly in green steel transformation projects that require long-term cost predictability.
“We call on the members of the German Bundestag to clarify that the grid cost relief will also apply beyond 2026 and into subsequent years,” Rippel said, adding, “Annual individual decisions mean annual uncertainty, and that is poison for companies’ investment decisions. In times like these, companies need long-term planning security to remain competitive and become climate neutral.”
Structural challenges require broader reforms
WV Stahl also points out that grid fees are structurally high due to massive grid expansion investments, which will continue over the coming decades as Germany integrates more renewable power. Combined with relatively expensive wholesale electricity, these costs risk putting domestic steel producers at a structural disadvantage compared to their global competitors.
The federation reiterated its call for a predictable, internationally competitive industrial power price, with a reliable and permanent cap on grid charges seen as a critical first step.
Northern European long steel market inhibited by weak demand from construction sector
But high energy prices mean mills in the region maintained their offer prices from the previous week, Fastmarkets understands.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €625-645 ($651-672) per tonne on Wednesday, widening week on week down by €15 per tonne from €640-645 per tonne on January 15.
Price increases established before the Christmas holidays have been maintained despite the weak demand, mainly because of ongoing high feedstock costs, sources said.
“These is ongoing poor demand, but we have had some inquiries and some [questions] about prices [and we] still have some running orders from last week,” one buyer source told Fastmarkets.
Deals were reported at around €625 per tonne while offers were reported at €635-645 per tonne. It remained unclear if the market would accept these higher offers.
“Energy costs are around 25% higher than they were last year, which is a big problem for the steel mills, especially with low demand,” the buyer source told Fastmarkets.
Sources in the Netherlands said they expected construction projects to pick up again in Spring, which could, in turn, stimulate buying activity.
“The government is talking about new construction projects being commissioned,” a trader source from the Netherlands said. “If it is true, we will see. Sentiment is better now we have a new government, that says it will prioritise building over environmental priorities.”
Import offers for rebar into Northern Europe were scarce due to weak demand and uncompetitive prices, sources said.
Scrap prices edged slightly higher, meanwhile, amid improved demand from Turkish mills for February deliveries due to improving steel sales in the country, sources told Fastmarkets.
Fastmarkets’ calculation of its daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was $334.58 per tonne on Wednesday, up from $332.34 per tonne week on week but down from $348.12 per tonne month on month.
Fastmarkets’ corresponding weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, was unchanged at €610-620 per tonne.
Wire rod import offers were reported at €590 per tonne for May delivery, but the appetite for imports was muted amid ongoing uncertainty regarding the current EU safeguard review.
“The last review from June 2024, which came into effect on July 1, 2024, caught a lot of [market participants] by surprise, so there is some risk aversion [now],” a wire rod producer source said.
Bleak outlook
The outlook for the European steel market remains bleak due to ongoing weak demand and negative growth in the region, combined with increasingly protectionist measures elsewhere, the International Rebar Producers and Exporters Association (IREPAS) said in its latest short-range outlook, published on January 15.
According to IREPAS, the EU is expected to announce a revision of protective measures on April 1.
Excess capacity from China has continued to put downward pressure on prices and, with increasing moves towards protectionism, heralded by the US, the short- or medium-term outlook was bleak, both in terms of prices or demand, the association said.
