The Spanish steelmakers association UNESID has presented ten policy proposals aimed at strengthening the competitiveness of Spain’s steel industry, addressing high energy costs, unfair trade practices and the challenges associated with industrial decarbonization.
The proposals have been submitted to Spain’s main political parties ahead of the general elections scheduled for November 29, with the association calling on the next government to prioritize industrial competitiveness in its economic, energy and climate policies. Global steel overcapacity, high energy prices, competition from third countries and increasing regulatory requirements continue to threaten the sector’s competitiveness, according to UNESID.
Calls for electricity costs of €40/MWh for energy-intensive industries
Ensuring competitive energy costs for steel producers is among the association’s main priorities. Spain’s steel industry consumes approximately 10 TWh of electricity and 10 TWh of natural gas annually. To address high electricity costs, the association called for structural measures to bring final electricity costs for energy-intensive industries to approximately €40/MWh. The proposed measures include permanently reducing network charges and levies to the maximum extent permitted, reviewing electricity tariff periods and system adjustment costs, and maximizing compensation for indirect carbon emissions costs.
Specific support mechanisms for gas-intensive industrial consumers and emergency measures to address energy crises were also requested. In addition, the association emphasized the need to guarantee timely access to electricity grids, warning that insufficient grid capacity could delay industrial electrification and decarbonization investments.
EU ETS reform and stronger CBAM protection sought
Revisions to the EU Emissions Trading System (ETS) were also proposed to ensure that industrial decarbonization remains technologically and economically viable. In this regard, UNESID urged the EU to maintain sufficient free emissions allowances while carbon leakage risks persist, remove conditions that penalize industrial installations and prioritize reinvestment of ETS revenues in industrial transformation. Regarding the Carbon Border Adjustment Mechanism (CBAM), the association called for its scope to be extended as soon as possible to downstream steel products and for an effective mechanism to protect European steel exports.
It also proposed reviewing the timetable for phasing out free emissions allowances based on CBAM’s demonstrated effectiveness in preventing carbon leakage. Stimulating demand for low-carbon steel through public procurement, public support mechanisms and regulatory and fiscal incentives for private-sector consumption was also highlighted as a priority.
Global steel overcapacity prompts for stronger EU trade defense measures
Global steel overcapacity exceeds 640 million mt, creating pressure on European producers through subsidized imports and market distortions, according to UNESID. To address these challenges, the association called on the Spanish government to support the effective implementation of the EU’s new steel regulation and prevent future revisions from weakening its ability to address global overcapacity. The proposals also include extending the regulation’s scope in 2027 to products manufactured predominantly from steel, strengthening EU trade defense instruments and increasing resources for customs enforcement and market surveillance.
To strengthen demand for domestically produced steel, the association proposed introducing an effective European preference in public procurement, publicly funded investments and strategic industrial value chains. A target of at least 50 percent European-origin steel was recommended, with origin verified under the “melted and poured” principle.
UNESID also recommended applying technology-neutral low-emission criteria that recognize different steelmaking production routes. Any extension of the European-origin designation to third countries should be limited to reliable trading partners meeting equivalent European standards on labor, environmental protection, climate policy and fair competition, according to the association.
Spanish steel industry processes 9.3 million mt of scrap annually
Securing competitive access to steel scrap and other strategic raw materials was highlighted as essential to supporting low-emission steel production. According to UNESID, Spain’s steel industry processes approximately 9.3 million mt of scrap into new steel annually, recovers nearly 80 percent of its waste and byproducts, and recirculates more than 90 percent of the water used in production. The association also called for European policies supporting scrap availability, industrial recycling and the removal of unnecessary regulatory barriers to circular economy practices.
Other proposals include faster industrial permitting procedures, greater financial support for decarbonization investments and operating costs, and stronger innovation programs accessible to small and medium-sized steel companies. The remaining priorities include improving industrial employment conditions, workforce training and regulatory stability, as well as strengthening coordination between Spanish authorities responsible for customs controls and enforcement of EU trade and environmental regulations.
Author: SteelOrbis Editorial Team
