EN Official Journal of the European Union C 114/23

Opinion of the Committee of the Regions on ‘Action plan for a competitive and sustainable steel industry in Europe’

2014/C 114/05

I. POLICY RECOMMENDATIONS

THE COMMITTEE OF THE REGIONS,

1. considers the steel industry to play an instrumental role in the overall economy of the European Union and to be a strategic sector of the highest order, with a direct impact on the economic, social and environmental development of all EU Member States;

2. believes that the evolution of the European steel industry will also have a direct impact on local and regional development and that a competitive and sustainable steel industry is both a condition for and a key factor in the economic recovery of numerous regions across Europe;

3. thinks that the introduction of a policy to support a self-sufficient European steel industry is crucial for safeguarding the long-term security of supply within the European Union. To maintain its independence, the steel industry must show that it is prepared to meet the challenges of the future by innovating and adopting green thinking. Any EU support should merely increase the pace of the change process that the steel industry itself must undertake;

4. draws attention to the harsh economic climate that has exposed the European Union — whose annual total production capacity exceeds 217 million tonnes of steel and actual output accounts for 11% of world production — to the international problems of overcapacity and weak demand on the market;

5. draws attention, in view of the fact that the demand for steel in Europe ‘depends on the economic and financial status of a few key steel using industries — for example the construction and the automotive sectors’ (1), to its opinions on industrial policy (2) and on CARS 2020: An action plan for a competitive and sustainable automotive industry in Europe (3);

6. points out that construction is one of the major steel-using sectors and considers that sustainable and energy-efficient construction must be priorities in this type of construction, which could be referred to as the renovation of public building stocks and could for instance tie in with the European social housing agenda called for repeatedly by the CoR and the European Parliament;

7. observes that, following a marked slump in industrial activity in recent years, many of the 500 production sites spread across 23 Member States have significantly cut output, while others have closed down completely; it notes with regret the loss of some 40 000 jobs;

8. notes that this difficult economic situation has had a negative impact on economic and social cohesion in the regions concerned;

9. recognises the need for a European strategy for the future of the steel industry in general;

10. considers it vital to ensure the direct involvement of local and regional authorities in this process, respecting local circumstances and specialisations and respecting the fact that they are best placed to assess the economic and social challenges and the necessity and viability of further investments to create or preserve jobs as well as to identify possible resources of such investments; they are also more familiar with issues regarding environmental impact assessment;

11. believes that efforts to improve the EU's competitiveness must be based in the principles of transparency and good business conditions for undertakings. It is, inter alia, on the basis of skills, innovative capacity and quality that the European steel industry can stand out from the competition;

12. advocates a bold industrial policy which focuses on improving the competitiveness of the EU steel industry and, where possible, on protecting or expanding existing steel plants and jobs, mainly by making the most of processing and recycling, so as to ensure that the sector does not lose the steel working skills and know-how acquired by its workers over the decades;

13. accordingly, calls for the introduction of continuous vocational training agreements to enable workers employed at steel plants likely to be undergoing restructuring to upgrade their skills in the steel sector;

14. equally, calls for the creation of additional retraining schemes for workers affected by site closures or restructuring, by enabling the wider use of structural funds through a revision of the EU's Globalisation Adjustment Fund and by offering programmes tailored to individual needs and to regional circumstances, while maintaining and boosting workers' skills in this sector;

15. calls for the creation of a system of financial assistance for areas affected by restructuring or plant closures, focusing on vocational re-training for workers and economic diversification and based on funding provided by public and private economic stakeholders;

16. stresses the need for all public authorities to adopt a coordinated approach for the formulation and implementation of restructuring measures in the steel sector;

17. welcomes the establishment of a high-level roundtable on steel at European level, but regrets that only one meeting is scheduled annually; suggests that this roundtable include a representative of the Committee of the Regions, together with representatives of the local and regional authorities, in order to promote cooperation and the exchange of information and best practices among the main stakeholders in the EU Member States;

18. believes that an evaluation of the action plan should be planned within twelve months of its adoption;

19. calls for the introduction of stronger social dialogue to tackle the crisis and for the close and direct involvement of the social partners in industrial policy in general and in steel sector policy in particular;

20. notes that a general industrial model based on innovation and substantial investment in new technologies is a key condition for the sustainable growth of the European Union;

21. notes that the European steel industry must offer innovative, quality products that address the needs of the market and set the European steel industry apart from its competitors; however, this approach will require substantial investment in high-cost production or processing methods and research and development.

22. considers that support for innovation needs to be extended to all steel-related industries. Thus, EIB financial instruments should be established under Horizon 2020 to promote R&D&I cooperation between steel companies and the regions where they are based in order to promote sustainability and economic activity;

23. reiterates its call for investment in skills and vocational training to encourage diversification, specialisation and innovation in the steel industry in order to make it more competitive in the future;

24. supports the Commission's effort to promote skills development measures and action targeting youth employment within the steel sector, but regrets that the Commission communication has not set out any measures to promote the transfer of skills within enterprises;

25. welcomes the Action Plan's focus on promoting innovation for the development of cleaner and more resource- and energy-efficient technologies, in order to reduce costs and comply with the EU's 2030 climate policy framework;

26. calls in the European Commission to give EU-level support for steel production using electric arc furnaces, since the CO2 emissions from this method are much lower than from steel production using iron ore;

27. reaffirms its support for the Commission's industrial ecology approach, which focuses on recycling materials and monitoring energy use;

28. points out in this connection that steel is a highly recyclable product and that steel production which uses recycled scrap in place of virgin iron ore can reduce energy inputs by around 75% and save approximately 90% of raw materials inputs;

29. reiterates its support for investment in innovation, better conditions for access to the market and to capital, human resources and skills as the pillars of a stronger industrial policy;

30. encourages the Commission to continue its assessment of its regulatory burden on the steel industry and its impact on competitiveness;

31. supports the Commission's efforts to launch a discussion on reducing the production costs of the European steel industry. The discussion should focus on innovation, energy-efficiency and environmental considerations;

32. stresses in particular the need to allow electricity-intensive industries to enter into long-term supply contracts — i.e., that cover a period of at least ten years and include revision clauses structured so as to guarantee regular supply under a long-term contractual framework and ensure effective cost-management and hence the competitiveness of the sector;

33. believes it necessary to develop freight networks, which are a key element for the regions, particularly remote and cross-border regions;

34. welcomes the Commission's proposal to bolster the demand for EU-produced steel, both at home and abroad, in particular through targeted action to boost demand in the automotive and sustainable construction sectors;

35. encourages the Commission to promote diversification of the steel industry, so as to limit its dependency on demand and to minimise the consequent risks;

36. supports the efforts to establish European standards for the sustainable production of steel products for the building industry and to introduce a quality label, the SustSteel Steel Construction Products Mark, which could help boost the added value and competitiveness of European products;

37. reiterates the importance of defending European standards in the fields of social policy, the environment, climate protection, safety at work and working conditions with a view to ensuring the EU's economic and social cohesion and the competitiveness of European enterprises on the global market;

38. supports the Commission's effort to take action in conjunction with third countries against unfair trading practices and, among other things, to encourage a level playing field;

39. believes that ensuring free and open trade in steel and steel products is important for the sector in the long term and notes that, despite the Commission's efforts to liberalise international trade within the WTO, industry estimates are based on the premise that approximately 65% of the global steel market is subject to protectionist barriers of all kinds;

40. shares the Commission's view that negotiations of bilateral trade agreements, in particular Free Trade Agreements (FTA), are a key instrument for achieving a level playing field for EU companies;

41. urges the Commission to adhere to the principle of the reciprocity of standards in negotiations on the agreements, at both bilateral level and at the level of the WTO;

42. encourages the Commission to not hesitate to employ all the force and determination needed to apply measures against the unfair trade practices of third countries and to modernise its trade protection instruments;

43. urges the Commission to verify in detail that the Surveillance 2 system ensures at least the same surveillance and monitoring guarantees against unfair subsidies dumping as the system of prior surveillance of imports of certain iron and steel products ((EU) No 1241/2009);

44. voices its concern regarding the length of time — on average two years — that the European Commission needs to instigate anti-dumping measures whereas, in the case of the USA, this period is only six months, and calls on the Commission to take steps that will enable it to work more swiftly;

45. supports the Commission in its efforts to do everything in its power to guarantee freedom of access to primary and secondary raw materials markets, particularly markets for iron ore, coking coal and recyclable materials, and considers that such freedom of access is an absolute pre-condition for ensuring the competitiveness of the European steel industry in global terms;

46. sees higher productivity, favourable conditions for investment and efforts to innovate as important preconditions for the steel industry's development and long-term survival in the EU. Improving energy efficiency would also be a good way of reducing energy costs, which could help to increase competitiveness;

47. points out that the Communication from the Commission does not mention logistics costs, especially with regard to maritime transport, the supply of primary raw materials, security of supply and economic development linked to port activities;

48. endorses the Commission's intention to improve the general conditions underpinning the growth potential of the EU's steel industry, including security of energy supply and competitive energy prices as well as encouraging more resource-efficient, low-carbon production;

49. supports all initiatives aimed at monitoring and controlling raw materials markets, including the scrap market, to combat illegal exports of scrap;

50. urges the Commission to carry out a cost-benefit analysis of the proposed measures for the European steel industry and to ensure that they are not in conflict with other European policies, particularly on environmental protection and sustainable development;

51. considers that the Action Plan for a competitive and sustainable steel industry in Europe should not be seen as an end in itself, but that the measures it proposes must necessarily be accompanied by efforts on the part of industry to stimulate investment and create jobs at European plants;

52. notes that the proposed Action Plan as it stands does not appear to run counter to the principles of subsidiarity and proportionality in that it complies with Article 173 TFEU, which stipulates that the EU has a supporting competence in industrial policy;

53. insists that, in accordance with Article 173 TFEU, the European Commission exploit the full potential of the Lisbon Treaty where industrial policy is concerned, particularly by taking any useful initiative to promote coordination between Member States on industrial policy, through the establishment of guidelines and indicators, the organisation of exchange of best practice, and the preparation of the necessary elements for periodic monitoring and evaluation.

Brussels, 28 November 2013. The President of the Committee of the Regions Ramón Luis VALCÁRCEL SISO

(1) COM(2013) 407 final.

(2) CoR opinion of 11 April 2013 on A stronger European industry for growth and economic recovery, rapporteur: Claude Gewerc (PES/FR), CDR2255-2012_00_00_TRA_AC.

(3) CoR draft opinion (rapporteur: Christian Buchmann (EPP/AT)), CDR1997-2013_00_00_TRA_PA.