The current state of the European steel industry, as well as the entire manufacturing value chain it supports, is marked by mounting challenges and growing uncertainty. Speaking at the EUROMETAL 75th Anniversary Conference, Henrik Adam, CEO of Tata Steel Europe, emphasised that deindustrialisation is not a distant risk – it is already underway. And the question is whether the European community wants to let it continue and make Europe dependent.
According to Adam, Europe’s industrial sector is the only one globally that is experiencing a consistent downward trend. While other regions are expanding their civil and processing industries, Europe is seeing plant closures and job cuts. “Job losses have already happened, more are being announced, and capacity is shutting down,” he warned.
European steelmakers operate under one of the strictest emissions frameworks in the world. While the global average carbon intensity is around two tonnes of CO2 per tonne of steel, many European mills perform significantly better. However, this comes at a cost, Metal Expert understands.
Europe’s ambition to decarbonise is not matched by global standards, putting EU producers at a disadvantage against imports from countries with lower environmental requirements and production costs.
“We already know of projects being set up to bypass EU rules,” Adam noted.
New low-carbon technologies are under development, but the scale-up from lab to industrial level will take time and require massive investment. Without a robust framework to manage exports and embedded emissions in downstream products, European mills will lose competitiveness after CBAM is fully implemented in 2026.
Energy costs remain one of the largest burdens for European producers. According to Adam, industrial electricity in Europe is, on average, 150% more expensive than in other regions, and industrial gas prices are more than double.
European producers transitioning to EAF technology are particularly exposed. He argued that Europe must establish a long-term, low-cost energy framework – or shift production of energy-intensive goods to regions within Europe where renewable power is cheaper. He cited southern countries like Spain, Portugal, and Greece as potential energy hubs.
Scrap metal is a vital input for low-emission steelmaking, but its availability in Europe is increasingly under threat. Currently, the EU exports around 19 million tonnes of scrap annually, a significant portion of which could be used domestically to reduce emissions, Metal Expert learnt.
“Scrap business is still lacking industrialisation, and also if you all [mills] convert [to EAF] in Europe to use more scrap, scrap will be easily a scarce resource,” he added.
Without safeguards, Europe could face a paradoxical situation – importing high-emission steel while exporting a key decarbonisation input.
Despite the challenges, Adam stressed that Europe still has the tools to secure its industrial future – but only if decisive action is taken. “It’s in our hands to ensure that our children and grandchildren have jobs in Europe that are not just about selling ideas or counting money,” he said.
Vlad Shementov
