Tag: Euractiv

The “fragile” European steel market is facing a crisis more severe than the financial downturn, with margins shrinking amid growing overcapacity at a time when steelmakers are needing to fund decarbonisation plans, Kallanish learns from a recent webinar.

The webinar, organised by Eurofer and hosted by Euractiv, heard panellists urgently calling for the European Commission to take action to support the sector, which has become uncompetitive amid high energy costs and large investments required to decarbonise.

Mario Arvedi Caldonazzo, vice-president of Eurofer, and chief executive of Arvedi, said: “The European steel industry is experiencing the most severe crisis since the 2009 financial and economic downturn. It is a real existential issue now.”

Caldonazzo pointed to the spillover effects of overcapacity in China into other markets, from where imports into Europe have now surged.

“We can’t compete against the Chinese state, because the Chinese steel industry is basically state owned and is completely subsidised by the central government; this is [an] unfair practice, and we have to react immediately,” he said.

“Europe lacks competitiveness. The high energy costs, the lack of raw materials such as scrap, which is the critical and strategic raw material for guaranteed transformation, conversion for our steel industry,” he added. “On both issues, energy and raw materials, the Commission has to intervene.”

Overcapacity was also noted by Giorgio Gori, MEP and vice-chair of the ITRE Committee. “The overcapacity is a huge threat to the survival of the European steel industry and requires appropriate measures to protect our production,” he observed. He also cited the significantly higher cost of energy than competitors, the difficult access to raw materials and the lack of public investment.

The industry move towards decarbonisation was also putting additional pressure on the European market.

“We added to a fragile situation which is now speeding up the problem. We added a market intervention which is unseen before when we said we want to decarbonise the steel industry in a decade,” said Christian Ehler, MEP and member of the ITRE Committee.

Caldonazzo also noted that public grants were difficult to access for decarbonising European companies despite support being announced as part of the Green Deal in 2019. He added that if decarbonisation is the priority for the EU, then companies need market defence, with the high costs of green steelmaking making the market uncompetitive.

Meanwhile, Judith Kirton-Darling, general secretary of IndustriAll, said of the European steel industry: “This house is on fire and unless we bring in the fire brigade right now the house will burn down.”

She called for action “at pace” and noted the danger of deindustrialisation and the geopolitical consequences of losing the strategic steel industry as a key energy transition material.

“We really need the new Commission to arrive running on the defence of this strategic industry,” she said. “We can’t wait any longer.”

“We are now in the real danger zone where if political decisions are not being taken right now, we risk major investment decisions going elsewhere in the world,” she added.

Kirton-Darling also pointed to the lack of an industrial policy attached to the targets set by the Green Deal. “You can’t have a target without an industrial strategy of how you reach the target.” However, she did see a way forward through the steel action plan. “The elements are there on the table. There is a question of sequencing. We need all the parts of the action plan on the table to have coherence,” she said.

Gori noted that the Commission needs to help create a green steel market and put forward the demand through public procurement and incentivise its use. Kirton-Darling also echoed this, stressing that from day one for the new commission, things like public procurement “are really low hanging fruit”.

Carrie Bone UK