COMMISSION STAFF WORKING DOCUMENT Towards competitive and clean European steel Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery
Date: 2021-05-05
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU growth strategy, EU industrial policy, competitiveness, coronavirus disease, digital single market, economic recovery, epidemic, green economy, industrial cooperation, industrial reorganisation

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 5.5.2021  SWD(2021) 353 final  COMMISSION STAFF WORKING DOCUMENT Towards competitive and clean European steel Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery {COM(2021) 350 final} - {SWD(2021) 351 final} - {SWD(2021) 352 final}  
 
 
COMMISSION STAFF WORKING DOCUMENT 

Towards competitive and clean European steel 

Accompanying the 

Communication from the Commission to the European Parliament, the Council, the 
European Economic and Social Committee and the Committee of the Regions 

Updating the 2020 New Industrial Strategy: Building a stronger Single Market for 
Europe's recovery 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contents 
1.

Introduction ......................................................................................................................... 2 

2.

  The steel industry in Europe and globally .......................................................................... 3 

3.

  The green and digital transition challenge .......................................................................... 7 

4.

  The EU toolbox - towards green, digital and resilient EU steel industry ......................... 12 

4.1

Funding and budget programmes .............................................................................. 12 

4.1.1  The Recovery and Resilience Facility ........................................................................ 12 

4.1.2  Research and Innovation ............................................................................................ 12 

4.1.3 

Innovation Fund ......................................................................................................... 13 

4.1.4 

InvestEU ..................................................................................................................... 14 

4.1.5  Sustainable financing taxonomy ................................................................................ 14 

4.1.6  Competition policy ..................................................................................................... 15 

4.2

Supportive regulatory environment ........................................................................... 16 

4.2.1  EU Emissions Trading System ................................................................................... 17 

4.2.2  Affordable, accessible and abundant decarbonised energy ........................................ 17 

4.2.3  Carbon Border Adjustment Mechanism ..................................................................... 19 

4.2.4  Standardisation ........................................................................................................... 19 

4.2.5 

Industrial Emissions Directive ................................................................................... 20 

4.2.6  Construction Products Regulation .............................................................................. 20 

4.2.7  Sustainable Products Initiative ................................................................................... 21 

4.2.8  Public Procurement .................................................................................................... 21 

4.3

  Global supply chains ................................................................................................. 21 

4.3.1  Need for a global level playing field .......................................................................... 22 

4.3.2 

International partnerships ........................................................................................... 23 

5.

  The social dimension and skills ........................................................................................ 24 

6.

  Conclusion ........................................................................................................................ 26 

1 

 
 
 
 
 
 
 
 
 
1.

  Introduction 

Steel is a vital material for a modern, industrialised economy. Modern buildings, cars, ships, 
tools,  industrial  machinery  and  household  appliances  would  not  be  imaginable  without  its 
unique  and  diverse  properties.  Steel  is  a  vital  component  in  most  of  the  EU’s  industrial 
ecosystems.  It  is  estimated  that,  for  every  person  in  the  EU,  there  are  currently  about  12 
tonnes of steel in use.1    

The  European  steel  industry  has  a  long  history  and  is  a  leader  in  innovation,  quality  and 
environmental  performance.  However,  the  sector  has  been  struggling  in  recent  years  –  with 
stagnating  demand,  international  trade  distortions  and  a  pandemic  that  has  disrupted  supply 
chains  and  impacted  downstream  sectors.  At  the  same  time,  the  European  steel  industry  is 
expected to invest in research and development, rethink its production processes and deliver 
substantial  emission  reductions  in  order  to  stay  competitive  and  contribute  to  climate 
neutrality  by  2050.  This  combination  makes  for  an  exceptionally  challenging  business 
environment and illustrates many of the challenges that EU industry at large faces. 

The Commission’s New Industrial Strategy for Europe, adopted a  year ago, sees industry at 
the heart of the twin  green and digital  transition  driving  change in  the  European  economy.2 
For this to happen, Europe needs a deeper and more digital  single market, greater resilience 
and  open  strategic  autonomy  in  line  with  the  recently  adopted  Commission  Trade  Policy 
Review.3 The Industrial Strategy recognised that energy-intensive industries are indispensable 
to Europe’s economy and that other sectors rely on them. It announced that the Commission 
would  support  clean  steel  breakthrough  technologies  leading  to  a  zero-carbon  steel  making 
process and recalled the importance of creating new markets for climate-neutral and circular 
products such as steel, cement and basic chemicals.   

The steel sector and other energy-intensive industries play a vital role in providing products 
and  services  to  a  wide-range  of  Europe’s  industrial  ecosystems,  which  are  assessed  in  the 
accompanying  staff  working  document  on  the  single  market  economy  report,  and  its  annex 
presenting  the  14  industrial  ecosystem  fiches4.  The  steel  sector  and  other  energy-intensive 
industries  also  face  common  challenges  to  achieve  their  twin  transition  and  resilience 
objectives.  

Steel is capable of being one of the first hard-to-abate sectors to produce green products, and 
to do so first in Europe, provided that the right framing conditions are in place. However, this 
is a race against time. 2050 is just one investment cycle away for a sector like steel, which has 
long-lasting  capital  assets.  The  next  five  years  will  be  crucial  for  seeing  which  part  of  the 
world is fastest to develop clean breakthrough technologies and processes to make steel.   

The  steel  sector  is  an  important  voice  in  the  High-Level  Group  on  Energy-Intensive 
Industries, which in  2019 developed its masterplan on how steel  and other energy-intensive 
industries could reach climate-neutrality and circularity by 2050.5 

This staff working document shows which policies and tools the EU has at its disposal or in 
the pipeline to help the steel industry in its transformation  – from research funding, through 
regulatory measures to trade instruments.  

1 Material Economics (2019): Industrial Transformation 2050. 
2 COM/2020/102 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0102  
3 COM(2021) 66 final, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52021DC0066&from=ES 
4 SWD(2021)351, Annual Single Market Report 2021, Annex III 
5 https://op.europa.eu/en/publication-detail/-/publication/be308ba7-14da-11ea-8c1f-01aa75ed71a1  

2 

 
 
                                                 
2.

  The steel industry in Europe and globally 

The  European  steel  industry  has  more  than  500  production  sites  operating  across  23  EU 
Member States.  The industry directly  employs 330,000 people,  and when including  indirect 
and induced jobs in other sectors, creates 2.6 million jobs throughout the EU.6  

Figure 1: EU Steel industry manufacturing facilities 

Source: JRC (data from Plantfacts)  

In 2019, total global steel production was 1.9 billion tonnes. The EU was the second biggest 
steel  producer  in  the  world,  accounting  for  around  150  million  tonnes  of  production,  after 
China,  whose  production  currently  represents  around  53%  of  global  production  (1  billion 
tonnes).7  

The  EU  currently  imports  around  41  million  tonnes  of  steel  annually,  mainly  from  non-EU 
European countries, CIS and Asian countries, or 26% of its consumption. It exports 30 million 
tonnes, or 18% of its production, mainly to non-EU European countries and North America.8 
In value terms, the trade balance of the iron and steel sector is positive, at EUR 1.1 billion in 
2019.9 

Steel is a crucial input to several downstream ecosystems, such as construction, mobility and 
automotive, or for mechanical engineering companies. Data on steel consumption per sector 
shows that construction account for 35% steel use in the EU, automotive for 19%, mechanical 
engineering  and  metal  ware  by  15%  each  and  tubes  for  10%10.  Companies  active  in  these 
sectors, many of which are small and medium-sized enterprises (SMEs), employ millions of 
workers  in  Europe  and  depend  on  EU  steel  production.  These  European  businesses  rely  on 

6 EUROFER, European Steel in Figures 2020.  
7 World Steel Association, Steel Statistical Yearbook 2020. 
8 World Steel Association, Steel Statistical Yearbook 2020. 
9 https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=International_trade_in_goods_by_type_of_good 
10EUROFER, European Steel in Figures 2020.  

3 

 
 
                                                 
having  access  to  steel  products  at  competitive  prices  in  order  to  be  able  to  compete,  even 
globally. 

Two main steelmaking processes are currently used in the EU:  

  60% of steel  is  made via the integrated  route, which produces virgin  steel  from  iron 
ore. Iron, in the form of sinter or pellets, is reduced in the presence of coke in a blast 
furnace (BF), and then converted into crude steel in a basic oxygen furnace (BOF).  
  40% of steel is made through the recycling route, where scrap steel is reprocessed in 

an electric arc furnace (EAF).11  

Steel is not a homogenous product and different types of steel can be distinguished based on 
chemical composition (carbon, stainless, electrical and specialty steel), physical form (flat and 
long steel), transformation stage (hot rolled, cold rolled, galvanised steel), as well as quality 
differentiation (high-end/advanced quality steel products vs basic grades steel).  

European  steel  demand  is  differentiated,  with  different  demand  patterns  and  prices  across 
European regions. Such differences come on top of what can be observed at the global level, 
where  prices,  trade  flows  and  demand  patterns  vary  greatly.  Some  steel  producers  act  as 
opportunistic players, shifting their supplies across the world for price arbitrage. The level of 
imports is not homogeneous across Europe, as imported steel is mainly steel of lower quality 
and basic grades, which does not meet the criteria of certain users that need more specialised 
steel, such as the automotive industry.  

Whilst  the  EU  steel  industry  operates  in  a  global  context,  the  markets  for  different  steel 
products are regional (EEA-wide) or possibly sub-regional in scope. Market structures largely 
differ  across  different  geographic  regions  and  sourcing  occurs  to  a  very  large  extent  at  a 
regional  level.  Importantly,  the  pricing  of  steel  products  can  be  significantly  differentiated 
across different  geographic areas around the world as prices are not only affected by global 
development  in  raw  material  and  global  demand/supply  balances  but  are  also  significantly 
affected by domestic factors that drive local price differentiation.12 For example, the relevant 
price  benchmarks  and  indices  for  steel  products  vary  geographically,  often  even  on  a  sub-
regional level.  

Nonetheless,  different  levels  of  environmental  commitments  and  targets  around  the  world 
already affect the EU steel industry's ecosystem  and competitiveness in  certain steel  grades. 
This will increase as the sector develops low emission products that cost more but apart from 
environmental  footprint  perform  identically  compared  to  conventional  products.  Such 
imbalances  may  give  rise  to  carbon-intensive  imports,  in  particular  of  commodity  steel 
grades,  replacing  more  expensive EU production  as  a  result  of  higher  cost  due  to 
less-regulated 
environmental  commitments, or 
jurisdictions.     

relocation  of 

to direct 

industry 

to 

Main actors in the European steel sector 

Following a number of consolidation waves (e.g. Mittal/Arcelor (2006), Outokumpu/Inoxum 
(2012),  SSAB/Rautaruukki  (2014),  ArcelorMittal/Ilva  (2018)  and  the  emergence  of  the 
Liberty  Steel  Group  (2018-present),  the  steel  industry  in  Europe  has  become  heavily 
concentrated. High levels of concentrations often lead to increased prices across many value 
chains.  

11 EUROFER, European Steel in Figures 2020. 
12 M.8444 – ArcelorMittal/Ilva, recitals 321 et seqq. 

4 

 
                                                 
In the recent consolidation wave, merger control enforcement contributed to keeping vibrant 
competition in the European steel markets to the benefit of the many downstream industries 
that  use  steel,  rely  on  affordable  materials  to  compete  globally  and  employ  millions  of 
Europeans.  By  prohibiting  anti-competitive  mergers  (e.g.  Tata  Steel/ThyssenKrupp)  or 
approving  mergers 
(e.g. 
ArcelorMittal/Ilva),  merger  enforcement  ensured  that  European  steel  customers  are  not  left 
with less choice, higher prices, or less innovation.  

structural  divestitures 

to  conditions, 

such  as 

subject 

Top 10 EU Steel Producers, 2019  

Company 

ArcelorMittal 

Tata Steel 

Thyssenkrupp 

Voestalpine 

 Riva 

Celsa 

Salzgitter AG 

SSAB Europe 

Liberty Steel Group 

 US Steel Kosice 

Source: EUROFER13 

ktonnes 

38 839 

10 000 

8 678 

7 224 

6 306 

6 276 

5 426 

5 071 

3 988 

3 541 

Continued vigorous merger control enforcement will play a crucial role during the transition 
towards a green, digital and resilient EU steel industry. Preserving vibrant competition among 
European  steel  players  will  ensure  that  the  steel  industry,  which  is  an  energy  intensive 
industry and a major user of raw materials, has the incentives to continue investing in R&D 
projects  and  deployment,  innovating  and  improving  their  production  processes  to  become 
more  sustainable.  Such  desired  beneficial  competition  should  extend  to  maintain  future 
innovation  competition  where  different  companies  could  develop  a  range  of  green 
technologies, methods and solutions.  

The current situation  

The COVID-19 pandemic dramatically reduced steel demand in the EU as well as abroad. In 
its  most  recent  Outlook  from  October  2020,  Worldsteel  expected  global  steel  demand  to 
contract  by  -2.4%  and  in  the  developed  economies  by  -14.9%.  Major  steel  consuming 
economies like India, Japan, the European Union and the United States experienced dramatic 
demand  declines  of  18.0%,  19.1%,  15.8%  and  22.9%,  respectively.  The  only  exception  is 
China  where  Worldsteel  anticipated  steel  demand  to  increase  by  8%  in  2020,  aided  by 
government infrastructure stimulus and a strong property market.14  

While  the  COVID-19  pandemic  has  had  an  impact  on  the  steel  demand  and  consumption, 
under normal circumstances, and without prejudice to the cyclical nature of the industry, steel 

13 Notes: Total Crude Steel production, all qualities; data refer to EU production 
14 OECD - STEEL MARKET DEVELOPMENTS – Q4 2020: https://www.oecd.org/industry/ind/steel-market-developments-
Q4-2020.pdf  

5 

 
                                                 
supply and demand in the EU are in broadly in balance. The structural overcapacities in EU 
steel  production  that  peaked  in  the  1970s  have  been  addressed  through  decades  of 
comprehensive policies on capacity rationalisation and strict State aid control.15   

The  global  shortfall  in  demand  in  2020  adds  to  a  long-standing  problem  of  overcapacity, 
which severely undermines the functioning of the global steel markets. According to the latest 
OECD  data,  global  overcapacity  (in  nominal  crude  terms)  is  now  624.1  million  tonnes,  i.e. 
more  than  three  times  the  full  EU  capacity  (203.1  million  tonnes),  and  one  fourth  of 
worldwide steel production capacity (around 2.4 billion tonnes). For the past 15 years, China 
alone has increased its steelmaking capacity by 599 million tonnes; this increase corresponds 
closely to the current global excess capacity in crude steel production. Other countries such as 
India, Indonesia and Turkey have recently also increased their steelmaking capacity. The EU 
is at the forefront of the international efforts to tackle the problem playing a key role in the 
creation  of  the  Global  Forum  on  Steel  Excess  Capacity  in  2016.  Since  2019,  China,  Saudi 
Arabia  and  India  have  disengaged  from  the  Forum’s  work.  Nevertheless,  joint  efforts  are 
needed to address the overcapacity issue and its root causes. 

In any case, the relationship between the production capacity for downstream steel products, 
including high-end steel grades, and global crude steel overcapacity is not linear. Crude steel 
overcapacities do not necessarily have a direct effect on the capacity, availability and price of 
various downstream steel products demanded by sophisticated European steel customers, such 
as car manufacturers and mechanical engineering businesses.   

15  As  shown  by  the  Commission’s  recent  merger  investigations  in  cases  M.8444  ArcelorMittal/Ilva  and  M.8713  Tata 
Steel/ThyssenKrupp/JV, the capacity utilisation in the EU is very high. 

6 

 
 
 
                                                 
3.

  The green and digital transition challenge  

Going Green   

Reducing the CO2 intensity of the energy intensive industries in general and the global steel 
sector in particular is crucial for meeting the objectives of the Paris agreement and the EU’s 
own  climate  targets.  The  EU  steel  industry  currently  accounts  for  221  Mt  GHG  emissions 
annually (including both  direct  and indirect  emissions). This  is 5.7% of total EU emissions. 
Energy-intensive  industries  altogether  accounted  for  665  Mt  GHG  emission  (only  direct 
emissions),  15%  of  the  EU  total.16  To  meet  the  ambitions  of  the  European  Green  Deal,  the 
steel industry has to transform itself in order to stay competitive.   

On  average,  steel  production  in  the  EU  belongs  to  the  most  CO2  efficient  worldwide,  and 
contrary to production in some third countries (such as Brazil) does not depend on the use of 
charcoal,  which  causes  deforestation.  The  EU  has  the  most  efficient  blast  furnaces/blast 
oxygen furnaces in the world. Their average emissions per tonne of steel produced is close to 
2.0 tCO2, considering direct emissions (scope 1), indirect emissions such as CO2 imbedded in 
electricity use (scope 2) and raw material sourcing (scope 3). The emissions factor of the grid 
electricity  is  a  determinant  factor  for  the  CO2  emissions  of  the  secondary  (EAF)  route,  a 
significant part of EU electricity already being decarbonised.  

Figure  2:  CO2  emissions  per  tonne  of  steel  in  China,  the  EU,  the  US  and  Mexico  by 
route 
process 

Source: Fraunhofer, IMWS (2020)17, figure adapted 

The  EU  steel  industry  has  already  reduced  emissions  by  26%  since  1990,  driven  by  energy 
efficiency improvements and higher recycling rates.18 Achieving climate-neutrality by 2050, 
however,  requires  radical  changes  to  the  way  steel  is  produced.  Major  steel  producers  and 
steel-producing  countries  (US,  China,  Japan,  South  Korea)  have  recently  adopted  climate 
neutrality goals by mid-century. The goal now is to translate this ambition into action. 

16 VUB (2018): Industrial Value Chain: A Bridge towards a Carbon Neutral Europe. 
17  https://www.bdsv.org/fileadmin/user_upload/Final_Scrap_Bonus_PDF_49.pdf.  Note:  The  two  data  points  given  for  CN 
refer to two different studies, cf. the original Fraunhofer, IMWS paper. 
18 VUB (2018): Industrial Value Chain: A Bridge towards a Carbon Neutral Europe. 

7 

 
 
                                                 
Increased circularity through the EAF route and a shift to fully decarbonised electricity will 
be imperative, however due to the continued need for virgin steel, fully new processes, such 
as hydrogen direct reduction and CCUS steelmaking processes, will also be needed.  

Figure 3: Main pathways and ongoing projects for low-carbon steelmaking 

Source: Eurofer 

Most low-carbon steel production pathways are not yet at technological maturity and it is not 
yet clear which process will dominate steel production in the future. Nevertheless, they show 
a high potential for future, innovative technologies, benefitting not only  climate but also air 
quality  trough  a  reduction  of  non-GHG  emissions.  Therefore,  further  research,  close-to-
market innovation and demonstration of multiple pathways will be necessary.  

While  the  commercial  roll-out  of  low-carbon  solutions  is  only  expected  around  2030, 
ambitious investments into pilot and demonstration plants are necessary today to enable rapid 
deployment and European market leadership once the technologies are available.  

Table 1: Technology Readiness Levels (TRL) of key low-carbon steelmaking 
technologies 

8 

 
 
 
 
Source: JRC 

Producing steel without CO2 emissions will come at a cost, however. Even when necessary 
research and innovation (R&I) investments are excluded, low-CO2 production routes have a 
higher cost due to their increased demand for hydrogen, electricity and steel scrap. The figure 
below shows cost estimates for different production routes, showing an increase of up to 20% 
for hydrogen direct reduction compared to traditional integrated mills.  

Figure 4: Cost per tonne of steel for different steelmaking pathways 

Source: Material Economics (2019): Industrial Transformation 2050 

The  European  Steel  Association  (‘Eurofer’)  estimates  that  in  comparison  with  conventional 
steel,  it  would  cost  EUR110  to  EUR320 more  per  tonne  to  produce  green  steel  through  the 
primary  (iron  ore)  route.  This  difference  mainly  results  from  higher  operational  costs,  in 
particular for the low CO2 energy and feedstock supply (electricity and hydrogen).    

If the full additional cost of green steel falls on the steel producer, it will be unable to compete 
on price with  conventional  steel.  If the cost  is  passed through to  the end-consumer product, 
the extra cost with green steel could be under EUR300 more for the price of a car and under 
EUR20 more for the price of a washing machine. Supportive policy efforts can help to bring 
about  these  new  markets  for  ‘green’  products,  generating  demand  from  end-consumers  for 
(slightly)  more  expensive  but  more  environmentally  friendly  products.  If  the  extra  cost  of 
producing green products is not passed to the end consumer because of competitive pressures 
from traditional steel makers or because of low demand from consumers for green steel, then 
it may be necessary to provide temporary compensation for the extra costs and simultaneously 
take measures to support the business case for clean products.  

Closing the loop – the role of circularity  

Steel is already a highly circular material. On average, the EU already recovers 85% of end-
of-life  steel  for  recycling.  Recycling  works  because  of  the  intrinsic  economic  value  of  steel 
scrap: the 131 Mt of scrap generated in the EU every year is worth some EUR 30 billion. The 

9 

 
 
 
 
EU uses 94 Mt of this scrap, making up half of the iron input to EU steelmaking. It exports 17 
Mt, with Turkey the largest destination.19   

Using steel scrap in the production process reduces CO2 emissions by 58%, air pollution by 
86%,  water  use  by  40%  and  water  pollution  by  76%.20  However,  there  are  challenges  to 
increasing the share of secondary steel: many steel applications, such as in car manufacturing 
or structural elements in buildings have low tolerances for copper content. Therefore, mixing 
different types of steel scraps and other, jointly recycled components containing copper (such 
as  electrical  wiring  in  cars),  currently  makes  it  impossible  to  use  secondary  steel  in  certain 
applications.  Circular-by-design  approaches  and  better  scrap  sorting  processes  will  improve 
the outlook and help accommodate increased circularity. 

By the 2050s, some estimates show that the amount of scrap available in the EU could be as 
large  as  total  EU  annual  steel  needs,  raising  the  interesting  prospect  that  recycling  could 
satisfy a large part of the EU’s steel needs, if the quality is good enough. Steel could become 
a nearly fully circular material.   

Figure 5: Scrap availability and steel production 

Source: Material Economics (2019): Industrial Transformation 2050 

The  Commission  is  currently  reviewing  the  Waste  Shipment  Regulation,21  with  the  aim  of 
stopping  exports  of  waste  that  have  harmful  environmental  and  health  impacts  in  third 
countries  and  improving  the  management  of  waste  exported  outside  the  EU.  Other  actions 
outlined in the new Circular Economy Action Plan22, relating to product design, quality and 
safety  of  secondary  materials  and  enhancing  their  markets,  will  contribute  to  making 
“recycled in the EU” a benchmark for qualitative secondary materials. 

19 Material Economics (2019): Industrial Transformation 2050 
20 EuRIC (2020): Metal Recycling factsheet 
21 Regulation (EC) No 1013/2006, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32006R1013  
22 COM/2020/98 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN  

10 

 
 
                                                 
By-products of the steel sector, such as iron and steel slag and slag-based products are used in 
the  cement  and  construction  sectors  as  secondary  raw  materials.  However,  ferrous  slag  and 
slag-based  products  increasingly  face  difficulties  in  being  accepted  in  public  tenders. 
Secondary  construction  materials  are  –  unlike  virgin  materials  –  reportedly  forbidden  in 
public tenders due to the burden of undertaking the environmental assessments that tenderers 
would  otherwise  have  to  carry  out.  This  is  a  real  obstacle  to  Circular  Economy  and  the 
accomplishment of the Green Deal goals, which could be addressed through prioritisation of 
secondary building materials in public tenders. 

The business case for green steel 

The  technology  pathways  are  largely  known.  The  remaining  challenge  is  to  attract  the 
necessary investment  to develop  green steel  first  in  Europe. There is  an appetite  for this, as 
the  plans  of  most  major  EU  steel  producers  show.  However,  several  factors  need  to  come 
together in order to create the business case for investment: 

-  A policy framework enabling financial incentives to emit less  
-  market  confidence  in  the  long-term  stability  of  the  EU  regulatory  and  policy 

framework 
the  availability  of  EU,  national  and  private  funding  along  the  path  towards  market 
deployment; 
certainty about the availability of effective carbon leakage measures, and  
robust protection against unfair trade practices. 

- 

- 
- 

Chapter 3 describes how the EU policy toolbox already  contributes to  creating the business 
case for investment. Remaining challenges are also identified.  

Digitalisation – an important enabler for green and circular steel  

The steel sector has long been a front-runner in digitalising its processes in order to improve 
resource efficiency and reduce emissions. Further digitalisation of the sector and better use of 
industrial data can optimise steel supply chains and enable new business models.  

Digital technologies will also act as crosscutting enablers for industrial transformation in the 
energy-intensive  industries  (EIIs).  Increased  automation,  process  control  and  demand-side 
response  will  result  in  greater  resource  efficiency.  Digital  technologies  can  speed  up  the 
deployment  of  breakthrough  processes  and  product  innovation.  Machine  learning  and 
artificial  intelligence  are  strategic  technologies  for  the  development  of  new  or  advanced 
materials and catalysts. Blockchain technologies can facilitate tracking of supply chains and 
products’  carbon  footprint.  Digital  product  passports  should  be  a  major  contribution  to 
sustainable product policy and enable greater circularity, including for the EIIs. 

A  report  by  Branca  et  al.  (2020)  in  the  journal  Metals23  reviews  the  challenges  and 
opportunities  that  lie  in  the  digitalisation  of  the  steel  sector.  It  outlines  the  potential  for 
increasing production efficiency and sustainability with the use of digital technologies, such 
as Internet of Things, predictive maintenance and robotics. It also emphasises the importance 
of  continuous  updating  of  workers’  skills  and  discusses  the  role  European  research 
programmes and skills blueprints play in driving their adoption. 

Data  sharing  among  industrial  players  will  be  important.  The  Commission’s  proposal  for  a 
Data Governance Act24  addresses the need for clear rules on secure data sharing. The EU’s 
Digital Europe Programme will invest in data spaces to optimise supply chains and predictive 
maintenance. 

23 https://www.mdpi.com/2075-4701/10/2/288/htm  
24 COM/2020/767 final , https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0767  

11 

 
                                                 
To handle the new process conditions and the corresponding new issues, e.g. related to safety 
and the stronger fluctuations of energy supply and process conditions, Machine learning and 
artificial intelligence techniques will play an ever-increasing role. Cybersecurity aspects must 
be deployed with specific strategies devoted to the steel sector.  

12 

 
 
 
4.

  The EU toolbox - towards green, digital and resilient EU steel industry   

4.1

 Funding and budget programmes 

4.1.1  The Recovery and Resilience Facility 

The  COVID-19  pandemic  has  created  enormous  challenges  for  industry,  but  also 
opportunities to accelerate the transition and to ‘build back better’.25 The EU and its Member 
States  have  secured  a  stimulus  package  of  EUR  1.8  trillion  made  up  of  the  new  long-term 
budget for 2021-2027 and the Next Generation EU (NGEU) recovery package. The Recovery 
and  Resilience  Facility  (RRF)  is  the  cornerstone  of  that  package,  with  EUR  672.5  billion 
available  in  loans  and  grants  to  support  reforms  and  investments  undertaken  by  Member 
States.  Member  States  will  prepare  recovery  and  resilience  plans  that  set  out  a  coherent 
package  of  reforms  and  public  investment  projects.  To  benefit  from  the  support  of  the 
Facility,  these  reforms  and  investments  should  be  committed  by  2023  and  implemented  by 
2026. 

Each recovery and resilience plan should allocate at least 37% and 20% of the Recovery and 
Resilience Facility for investments and reforms that foster respectively the green and digital 
transitions. The Commission will assess the plans against these targets.  

NGEU  and  in  particular  the  RRF  provide  an  unprecedented  opportunity  for  industry  and 
Member  States  to  accelerate  the  decarbonisation  of  heavy  industries  like  steel,  developing 
resilient  value  chains  and  building  open  strategic  autonomy.  Such  investments  offer  the 
opportunity to bring the industry onto a transition path towards climate neutrality, recognising 
that initial projects may not be fully carbon-free themselves but nevertheless contribute to the 
necessary  advancement  of  low-carbon  technologies.  Projects  relating  to  breakthrough 
technologies,  such  as  hydrogen-based  steelmaking,  carbon  capture,  utilisation  and  storage, 
investments in infrastructure and skills will be important and could be financed under RRF, 
provided that they comply with the “do-no-significant-harm” principle, ensuring that they do 
not significantly harm the environment.26  

4.1.2  Research and Innovation  

The EU needs to step up its R&I in breakthrough technologies to support the development of 
green steel. Building on the work already carried out under past Framework Programmes and 
with the help of the Research Fund for Coal and Steel (RFCS), the Commission is launching a 
Horizon  Europe  European  partnership  on  clean  steel.27  It  will  focus  on  accelerating  and 
deploying the most promising solutions for climate-neutral steel production. The partnership 
will support research and innovation activities from the pilot to the demonstration phases of 
breakthrough  technologies  for  carbon  neutral  steel  production,  while  leveraging  private 
investments. 

The specific aims of the clean steel partnership are: 

  Developing, testing and  scaling breakthrough technologies for clean steel production 

consistent with the climate neutrality objective by 2050.  

  Achieving TRL 8 by 2030 in at least 12 technologies funded by the Partnership; 

back 

(2020): 

Building 

better:  A 

25  OECD 
https://www.oecd.org/coronavirus/policy-responses/building-back-better-a-sustainable-resilient-recovery-after-covid-19-
52b869f5/  
26    Commission  Notice  C(2021)  1054  final  clarifies  that,  in  relation  to  measures  supporting  activities  covered  by  the  EU 
Emission Trading System (ETS) in particular, in order not to distort the market signals put in place by the ETS,  activities 
with projected CO2 equivalent emissions that are not substantially lower than the relevant benchmarks  established for free 
allocation should generally not be supported under the RRF. 
27 SWD(2021)351, Annual Single Market Report 2021, Annex II 

sustainable, 

COVID-19, 

recovery 

resilient 

after 

13 

 
                                                 
  Ensuring  the  construction  by  2030  of  at  least  two  demonstrations  of  a  technological 
pathway (Carbon Direct Avoidance, Process  Integration, Carbon Capture and Usage, 
Circular Industry) leading to 80% CO2 emission reduction compared to 1990 levels for 
the plants where the demonstration projects are implemented. 

  Fostering  European  steel  competitiveness  tackling  digitalisation,  upskilling  and  new 

markets creation. 

  Providing  the  European  Steel  sector  with  a  first  mover  advantage  to  introduce  clean 

steel technologies. 

Based on the estimated industrial efforts from the steel sector in R&I projects falling within 
the scope of the Clean Steel Partnership, the total resource requirement is estimated at around 
EUR  2.5  billion,  as  estimated  by  ESTEP,  the  European  Steel  Technology  platform, 
representing  the  private  side  of  the  Clean  Steel  partnership.  Once  a  technology  has 
successfully been demonstrated, an additional investment of around EUR 9 billion is needed 
for its first roll-out.  

The  alignment  and  coordination  of  private  and  public  funding  ensures  financing  up  to  the 
deployment phase. The European Parliament Pilot Project “Green Steel” will provide a set of 
scenarios on this.   

The  clean  steel  partnership  relies  on  synergies  of  funds  up  to  EUR  700  million  coming  in 
equal  parts  from  Horizon  Europe  and  assets  of  the  European  Coal  and  Steel  Community  in 
liquidation.  The  Commission  is  exploring  the  possible  use  of  part  of  the  funding  under  the 
European Coal and Steel Community ‘in liquidation’ (ECSC). A revision of the RFCS legal 
bases (announced in the Commission’s EU Green Deal Investment Plan in January 202028) is 
moving forward with the aim to be adopted in 2021 . 

Steel will also be part of a broader Horizon Europe partnership on energy-intensive industries. 
Under  Horizon  2020,  the  steel  sector  was  part  of  the  public-private  partnership  SPIRE  - 
Sustainable  Process  Industry  through  Resource  and  Energy  Efficiency.  It  addressed  process 
optimisation,  waste  material  recovery,  alternative  feedstock,  waste  energy  valorisation  and 
industrial  symbiosis.  Under  Horizon  Europe,  this  will  become  the  European  partnership 
Processes4Planet.  This  partnership  aims  at  circularity  and  an  extensive  decarbonisation  of 
European  process  industries,  with  a  strong  focus  on  competitiveness  with  a  cross  sectorial 
approach. 

4.1.3  Innovation Fund  

The  Innovation  Fund  established  under  the  EU  Emissions  Trading  System29  is  one  of  the 
world’s  largest  funding  programmes  for  the  demonstration  of  innovative  low-carbon 
technologies  in  multiple  sectors,  including  energy-intensive  industries  such  as  steel.  It  will 
provide about EUR 18 billion30 of support over 2021-2030 for the commercial demonstration 
of  innovative  low-carbon  technologies  (in  energy  intensive  industries,  including  CCS  and 
CCUS; renewable energy; energy storage), aiming to bring to the market industrial solutions 
to decarbonise Europe and support its transition to climate neutrality.  

The first call for large-scale proposals with capital expenditure above EUR 7.5 million closed 
in October 2020 and received 311 proposals for innovative clean tech projects located in all 
Member States and covering all sectors, including steel. Following the evaluation of the first 

28 COM/2020/21 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0021  
29  Commission  Delegated  Regulation  (EU)  2019/856  of  26  February  2019  supplementing  Directive  2003/87/EC  of  the 
European Parliament and of the Council with regard to the operation of the Innovation Fund, https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:32019R0856  
30 Assuming a carbon price of EUR 40/tCO2-eq. 

14 

 
                                                 
stage  of  the  application  process,  70  projects  continue  to  the  second  stage  and  submit  full 
applications  for  the  first  Innovation  Fund  call  for  large-scale  projects,  while  all  applicants 
have been informed about the results. Grants will be awarded at the end of 2021.   .    

The  Commission  is  also  running  the  first  call  for  small-scale  projects  under  the  Innovation 
Fund  with  capital  expenditure  between  EUR  2.5  and  EUR  7.5  million.  The  Commission 
received  232  applications  for  innovative  clean  tech  projects  in  renewable  energy,  energy-
intensive  industries,  energy  storage,  and  carbon  capture,  use  and  storage  (CCUS).31 
Applications  come  from  projects  to  be  implemented  in  all  Member  States,  Iceland  and 
Norway  and  the  proposed  projects  have  requested  a  total  of  more  than  EUR  1  billion. 
Proposals that fulfil the admissibility and eligibility conditions will be evaluated by external 
evaluators against the award criteria and applicants will be informed about the results of the 
evaluation in August 2021. The grants will be awarded in the end of 2021.  

Further calls for proposals, one for large-scale and one for small-scale projects, are planned to 
be launched later in 2021. 

For energy intensive industries, such as steel, the main technological pathways outlined in the 
proposals focus on hydrogen, carbon capture use and/or storage (CCUS), as well as recycling 
(e.g.  scrap  metal,  plastics),  pyrolysis,  and  electrification.  The  upcoming  proposal  for  a 
revision of the EU ETS  in light of increased climate ambition and its accompanying impact 
assessment will also address the future of the Innovation Fund. 

4.1.4  InvestEU  

The  InvestEU  Fund,  as  part  of  the  InvestEU  Programme,  will  finance    a  wide  range  of 
investments, including in energy-intensive industries. An EU Guarantee of EUR 26.2 billion 
underpinned  by  budgetary  means  of  the  Next  Generation  EU  recovery  instrument  and  the 
Multiannual  Financial  Framework  2021-2027,  will  allow  additional  public  and  private 
investments of around EUR 370 billion. 

Financial support under the InvestEU Fund is demand-driven and can take various forms of 
equity  or  loan  finance  provided  by  the  European  Investment  Bank  Group  or  other 
implementing partners.   

The  InvestEU  Fund,  with  its  four  priority  areas  (“policy  windows”),  has  a  strong  focus  on 
financing investments that have a positive climate and environmental impact. The InvestEU’s 
Sustainable Infrastructure Window supports investments in sustainable industrial applications 
which  help  reduce  greenhouse  gas  emission.  The  InvestEU’s  Research,  Innovation  and 
Digitisation Window supports new environmentally sustainable technologies that lead to the 
reduction  of  greenhouse  gas  emissions  of  energy-intensive  industries.  Both  windows  are 
relevant for steel.      

4.1.5  Sustainable financing taxonomy  

On  8  March  2018,  the  EU  Commission  published  its  Action  Plan:  “Financing  Sustainable 
Growth”, stating the need for a deep rethink of the European financial framework. The Action 
Plan describes the EU strategy for sustainable finance and is part of the implementation plan 
of  Article  2(1)(c)  of  the  Paris  Agreement,  relating  to  the  alignment  of  financial  flows  with 
global climate goals and the UN 2030 Agenda for Sustainable Development.  

The Sustainable Financing Taxonomy forms part of the implementation of the Action Plan on 
Sustainable Finance. It aims to further incentivise and channel private sector investment into 

31 
funding_en  

https://ec.europa.eu/clima/news/first-innovation-fund-call-small-scale-projects-232-applications-eur-100-million-eu-

15 

 
                                                 
sustainable  development,  by  making  investors  more  aware  of  what  they  invest  in  and  by 
giving investors important tools to invest sustainably.  

The  first  Delegated  Acts  setting  sustainable  financing  taxonomy  criteria  for  climate  change 
mitigation  and  adaptation  and  aligned  on  the  European  Green  Deal  has  been  approved  in 
principle on 21 April 2021 and will be formally adopted at the end of May. 

Steel  production  is  included  among  the  activities  listed  in  the  EU  taxonomy  for  sustainable 
investments  to  incentivise  environmental  improvements  in  the  manufacturing  of  steel  over 
time. While steel production is not low carbon today, the technical screening criteria for steel 
production  in  the  taxonomy  recognise  the  most  climate-friendly  forms  of  production,  while 
ensuring  no  significant  harm  to  other  environmental  objectives.  The  technical  screening 
criteria also recognise the important role of research, development and innovation activities in 
low-carbon  steel  manufacturing  technologies,  especially  for  those  technologies  which  are  at 
an  already  advanced  stage  of  development  but  not  yet  commercial.  The  criteria  will  tighten 
over  time  to  ensure  the  need  for  constant  efficiency  gains  and  improvements  in  the 
environmental footprint of steel manufacturing. Capital expenditure for investments to reach 
these  criteria  will  be  eligible  for  green  bonds  under  the  forthcoming  EU  Green  Bond 
Standard. 

The  taxonomy  criteria  for  manufacturing  of  steel  are  setting  a  long-term  ‘gold  standard’, 
encourage  investment  in  new  breakthrough  technologies  with  which  markets  are  as  yet 
unfamiliar  and  leave  room  for  transitional  investments  that  help  the  steel  industry  move 
towards the European Green Deal goals.  

4.1.6  Competition policy  

As for any other sector,  investment  and structural  adjustments of steel  output in  the EU are 
genuinely  market  driven.  Investment  in  development  and  deployment  of  breakthrough  low-
carbon  technologies  will  require  private  financing,  supported  however  by  relevant  EU 
programmes and national measures, where necessary and compatible with EU State aid rules. 
As  such,  the  steel  sector  can  benefit  from  certain  types  of  State  aid  to  replace  existing 
production processes with less or even zero emitting ones. 

State  aid  is  possible  for  Research,  Development  and  Innovation  (RDI)  activities  into 
innovative  breakthrough  clean  technologies,  as  well  as  for  RDI  activities  into  digital  tools 
relevant for the industry’s transformation. 

Under the Guidelines on State aid for environmental protection and energy (EEAG), aid may 
be granted for the introduction of climate or other environmental friendly technologies. The 
Commission  is  currently  preparing  the  revision  of  the  EEAG.  The  support  is  limited  to  the 
shift to green technologies and may not generate undue distortions of competition and trade in 
the internal market. It must also meet the compatibility requirements under State aid rules. 

For  example,  steel  producers  may  receive  investment  aid  through  national  aid  schemes  for 
significantly improving the environmental footprint of their production facility, if the positive 
impact on environmental protection substantially exceeds, on the one hand, the level required 
by law or envisaged by Union objectives and, on the other hand, what the market itself would 
bring about. The aid must be limited to the extra environmental costs, comply with applicable 
maximum  aid  intensities  and  be  subject  to  tendering.  Similarly,  under  certain  conditions,  in 
particular, when competitive bidding takes place, operating aid would be possible to partially 
compensate  steel  producers  for  the  additional  costs  caused  by  the  generation  of  renewable 
energy or energy sources, such as renewable/green hydrogen. However, the support is limited 
to  the  difference  between  the  costs  for  producing/purchasing  grey  energy  and  the  costs  for 
producing/purchasing green energy. 

16 

 
The  Commission  has  recently  adopted  a  State  aid  decision  that  approves  aid  via  Carbon 
Contracts  for  Difference  (CCfD)  for  renewable  energy  production,  low  carbon  hydrogen 
production,  low  carbon  electric  boilers,  CCS  and  waste  heat  recovery.32  Cross-sectoral 
competitive  bidding  processes  were  required  to  select  beneficiaries  of  the  support.    Aid  is 
linked  to  CO2  emission  reductions,  taking  into  account  also  the  indirect  emissions  of 
electricity. 

IPCEI 

Important  projects  of  common  European  interest  (IPCEIs)  are  typically  ambitious  cross-
border research and innovation projects or infrastructure projects with a European dimension 
entailing significant risks and generating significant spillover effects across the EU that would 
not be carried out without significant pooling of public and private resources and investments 
and cooperation between Member States.  

Steel  producers,  like  other  project  owners,  could  receive  aid  for  ambitious  research  and 
development and aid for first industrial deployment provided their project generates important 
spillovers. Both investment aid and operating aid are allowed, but only for the duration of the 
research or development phase and during the first industrial deployment; long-term operating 
aid is not possible. Therefore, the IPCEI rules exclude both investment and operating aid for 
the commercial mass production phase of such projects. 

A project that is part of an integrated IPCEI needs to demonstrate that it is necessary to reach 
the  objective  of  the  IPCEI  and  complementarity  to  the  other  projects.  Research  and  first 
industrial  deployment  projects  must  in  addition  demonstrate  that  they  deliver  innovations 
going beyond the state of the art, while infrastructure projects need to be of major importance, 
either  for  the  environment,  for  energy  or  for  the  Union’s  transport  strategy.  Environmental, 
energy or transport facilities and infrastructure that are not accessible to third parties on non-
discriminatory terms do not count as generating the necessary significant spillovers across the 
EU.  

Where  an  undertaking  receives  aid  as  part  of  an  important  project  of  common  European 
interest,  it  is  required,  inter  alia,  to  demonstrate  positive  spillover  effects  beyond  the 
beneficiary  undertaking  or  the  economic  sector  or  the  Member  State  concerned.  Similarly, 
distortions of competition caused by the aid must be limited as far as possible and in this case 
additional  spillovers  must  outweigh  possible  distortions.  Demonstrating  these  two  criteria 
could  be  more  challenging  for  application  projects  than  for  open  infrastructure  projects.  In 
addition,  the  IPCEI  must  respect  the  principle  of  phasing  out  environmentally  harmful 
subsidies. 

Relevant Industrial Alliances could also be an opportunity to identify relevant gaps and types 
of projects that can address them, possibly in view of forming IPCEIs). Steel stakeholders are 
actively  engaged  in  the  European  Raw  Materials  Alliance  and  in  the  Clean  Hydrogen 
Alliance.  They  are  also  involved  in  the  work  by  22  Member  States  to  prepare  an  IPCEI  on 
hydrogen33 and interested in a possible IPCEI for low-carbon industry, building on the work 
of the Strategic Forum for Important Projects of Common European Interest.34 

The EEAG, IPCEI and RDI State aid rules are currently undergoing a revision process. 

greenhouse 

32 Commission Decision C(2020) 8773 final regarding State Aid case SA.53525 (2020/N) – The Netherlands SDE++ scheme 
for 
energy. 
gas 
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2410  
33 
systems-value-chain.pdf?__blob=publicationFile&v=8 
34 Strengthening Strategic Value Chains for a future-ready EU Industry - report of the Strategic Forum for Important Projects 
of Common European Interest, https://ec.europa.eu/docsroom/documents/37824 

https://www.bmwi.de/Redaktion/DE/Downloads/M-O/manifesto-for-development-of-european-hydrogen-technologies-

renewable 

including 

reduction 

projects 

17 

 
                                                 
4.2

 Supportive regulatory environment   

4.2.1  EU Emissions Trading System   

The EU ETS has proven to be an effective tool in reducing greenhouse gas emissions and it 
will  play  a  key  role  in  achieving  the  increased  2030  climate  ambition.  In  line  with  the 
European Green Deal, the Commission will present its proposal for a review of the EU ETS in 
June 2021. 

The increased 2030 climate ambition will require a strengthening of the emissions cap of the 
ETS.  This  could  be  achieved  either  through  a  change  in  the  linear  reduction  factor  which 
determines  the  rate  of  annual  reductions  in  the  cap,  through  a  one-off  reduction  of  the  cap 
(rebasing), or through a combination of both. The Commission is assessing which option for 
strengthening  the  cap  would  be  most  opportune,  also  in  the  context  of  the  review  of  the 
functioning of the Market Stability Reserve. 

The ETS has an effective carbon leakage protection framework35 and the Commission aims to 
ensure this will remain the case in the future. The possible impact of a strengthened cap on the 
availability of free allocation for industry and risks of carbon leakage is also being assessed.  

4.2.2  Affordable, accessible and abundant decarbonised energy  

Steel  is  an energy intensive sector with  relevant  energy  costs shares in  its production costs: 
7.7% on average for the aggregate sector between 2010-2017,36 but this share can reach up to 
20% 37 for certain steelmaking processes, such as the electric-arc furnace secondary steel. 

Coal currently plays an important role in the sector, not only covering energy needs but also 
providing a key chemical function in the process, but it is next in line to be phased out and 
must  be  replaced  by  decarbonised  energy  sources,  or  be  combined  with  carbon  capture 
technologies.  All  low-carbon  production  pathways  for  steel  rely  on  the  intensive  use  of 
electricity  –  either  directly,  as  in  EAF  steel  recycling  and  electricity-consuming  CCUS 
equipment, or indirectly through the use of green hydrogen. The steel industry estimates that 
it will require about 165 TWh of electricity and 5.5 million tonnes of hydrogen annually by 
2050  to  make  the  total  current  volume  of  primary  steel  using  hydrogen,  resulting  in  a  total 
electricity demand of 400 TWh – four times what the sector currently consumes.38  

Given  the  vastly  increasing  demand  for  electricity  in  all  sectors  of  the  economy  (electric 
vehicles, heat pumps, electrolysers, etc.),39 the expansion of renewables and their integration 
into the energy system40 – through expansion and upgrading of grids and through instalment 
of  massive  energy  storage  capacity  to  accommodate  supply  variability  –  will  have  to  keep 
pace. For hydrogen, new infrastructures will have to be built, complementing the existing gas 
grid, and the cost of electrolysers will have to come down through technological development. 
This will require more ambitious commitments and investments from Member States and an 
infrastructure  planning  framework  that  takes  into  account  the  changing  needs  of  energy-
intensive industries.  

35 Ex-post studies have not found substantial levels of carbon leakage from existing mechanisms like the EU ETS, although 
other  studies  argue  that  carbon  leakage  has  not  happened  precisely  because  of  the  free  allocation  of  allowances. 
 https://www.eca.europa.eu/Lists/ECADocuments/SR20_18/SR_EU-ETS_EN.pdf  
36  Report  on  energy  prices  and  costs  in  Europe,  SWD/2020/951  final,  Table  13.  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=SWD:2020:951:FIN  
37  Production  costs  from  the  iron  and  steel  industry  in  the  EU  and  third  countries,  JRC121276  available  at     
https://publications.jrc.ec.europa.eu/repository/handle/JRC121276 
38 2019 EU27 electricity consumption of the steel sector in Eurostat is 110 TWh. 
39 Total electricity demand in the EU projected to more than double by 2050, cf. Impact Assessment accompanying the 2030 
Climate Target Plan, SWD(2020) 176 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020SC0176  
40  Cf.  EU  Strategy 
content/EN/ALL/?uri=COM:2020:299:FIN  

https://eur-lex.europa.eu/legal-

Integration,  COM(2020) 

for  Energy  System 

299, 

18 

 
                                                 
Especially  challenging  is  that,  absent  challenging  relocations  of  entire  industrial  clusters, 
industrial electricity demand will increase in places where these clusters are currently located 
and  not  necessarily  where  renewable  energy  sources  are  abundant.  This  could  create 
increasing  geographical  imbalances,  which  would  have  to  be  addressed  through  long-range 
electricity  transmission  or  hydrogen  transport,  including  possible  import  from  other 
renewables-rich  regions  (such  as  North  Africa).  The  Commission’s  proposal  for  a  revised 
TEN-E  Regulation,  adopted  on  15  December  2020,41  would  adapt  the  EU  framework  for 
cross-border projects to better integrate renewables, CCS and hydrogen infrastructure; it also 
proposes to simplify and accelerate permitting and authorisation procedures. 

Figure  6:  Regional  assessment  of  renewable  energy  potential  and  future  electricity 
consumption42  

Source:  Kakoulaki  et  al.  (2021):  Green  hydrogen  in  Europe  –  A  regional  assessment: 
Substituting existing production with electrolysis powered by renewables  

41 COM(2020) 824 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020PC0824 
42  Renewable  energy  potential  based  on  JRC  ENSPRESO  data;  future  electricity  consumption  based  on  current  electricity 
consumption plus electricity requirements to move from fossil fuel-based to green hydrogen 

19 

 
 
                                                 
As the electricity price becomes an increasingly dominant factor in the cost of steel and other 
basic materials  produced by the energy-intensive industries, reducing the cost  of producing, 
storing and transmitting (renewable) power is of prime importance. The regulatory framework 
in  relation  to  electricity  markets,  network  charges  and  taxation  will  remain  key  to  ensure 
competitively  priced  electricity  and  support  the  electrification  and  decarbonisation  of  the 
industry and to maintain its international competitiveness.  

Electricity prices may display a higher short-run volatility as a result of the increasing shares 
of  intermittent  renewables  and  a  slow  uptake  of  flexible  demand  and  energy  storage.  This 
could  be  challenging  for  some  industrial  consumers,  but  offer  opportunities  for  others. 
Electro-intensive  industries  that  can  adjust  their  production  flexibly  (such  as  aluminium 
smelters) already today offer “interruptible load” to grid operators, meaning that part of their 
electricity  load  can  be  cut  off  at  short  notice  to  stabilise  the  grid,  for  which  they  receive 
substantial compensation. In the future, as regular patterns of electricity prices emerge (e.g. a 
daily trough around midday, when solar generation is strongest), more industries, such as the 
steel industry, could adapt their production cycles to both provide grid balancing services and 
benefit from lower electricity prices. 

4.2.3  Carbon Border Adjustment Mechanism 

The  Commission  is  currently  carrying  out  an  impact  assessment  on  a  Carbon  Border 
Adjustment Mechanism (CBAM), which is set to be proposed by summer 2021. It will assess 
different  design  options  against  the  objectives  of  the  mechanism,  which  is  to  avoid  carbon 
leakage, and its economic, environmental and social impacts. Additional  criteria include the 
administrative  and  compliance  costs,  the  feasibility  and  legal  aspects  of  the  mechanism. 
CBAM  will  be  compliant  with  World  Trade  Organization  rules  and  other  international 
obligations of the EU.  

CBAM  is  essentially  an  environmental  measure  to  enable  the  EU’s  increased  climate 
ambition by reducing carbon leakage risks. CBAM will ensure that the price of import reflect 
their carbon emissions.  

Steel  is  one  of  the  sectors  included  in  the  possible  initial  shortlist  of  CBAM  sectors.  The 
choice  of  sectors  will  take  account  of  multiple  criteria,  balancing  coverage  in  terms  of 
greenhouse gas emissions while limiting complexity and administrative effort. Criteria under 
discussion include whether the sector is a significant emitter of greenhouse gas emissions and 
the sector’s exposure to a significant risk of carbon leakage, based on trade intensity as well 
as carbon intensity, as defined pursuant to the EU ETS Directive.43  

The impact assessment will take account of the results of the public consultation open to all 
stakeholders. The responses received indicate that  the steel  sector should  be included in  the 
sectoral coverage of the CBAM.44  

4.2.4  Standardisation   

Standardisation  will  be  important  to  create  markets  for  clean  technologies.  While  normal-
performing companies focus on making quality products, more advanced companies also seek 
to maximise the setting of patents for innovation. The best companies go one step further and 

43  Directive  (EU)  2018/410  of  the  European  Parliament  and  of  the  Council  of  14  March  2018  amending  Directive 
2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814, OJ L 
76, 19.3.2018, p. 3–37.  
44  Summary  Report:  Public  consultation  on  the  Carbon  Border  Adjustment  Mechanism,  p.4.  Ref.  Ares(2021)70541  - 
05/01/2021 
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-EU-Green-Deal-carbon-border-
adjustment-mechanism-/public-consultation 

20 

 
 
                                                 
seek to set the standards that the whole world will follow. The EU has traditionally been at the 
forefront of standard-setting and is  now freshly aware how strategically important  standard-
setting has become for the green and digital transition.  

At the request of the Commission45, the European standardisation bodies developed a generic 
standard  to  encourage  performance  improvements  in  industrial  installations.  It  includes  EN 
19694-2 for steel, which sets out the CO2 accounting rules and metrics to assess the emission 
performance of steel production facilities.  

The EN 19694-2 standard enables application of a life cycle approach, with  the potential to 
provide  accurate  signals  to  producers  and  investors  alike  on  the  sustainability  performance 
along the entire steel value chain, including all inter-connected steelmaking processes. 

4.2.5 

 Industrial Emissions Directive 

Steel  production  brings  a  number  of  environmental  impacts  including  air  emissions  (CO, 
SOx, NOx, dust), emissions to water, hazardous wastes, and solid wastes. In 2017, 222 iron 
and steel installations were operating under the Industrial Emission Directive (IED) permit.46 

The  Commission  regulates  emissions  falling  under 
through  Commission 
Implementing  Decisions  establishing  Best  Available  Techniques  (BAT)  conclusion  for  Iron 
and  Steel  Production  and  Ferrous  Metal  Processing.  The  Technical  Working  Group 
established  under  the  so-called  Sevilla  Process  (involving  Member  States,  environmental 
NGOs  and  industry),  is  presently  reviewing  the  BAT  Conclusions  for  Ferrous  Metal 
Processing. EUROFER represents the steel industry there.  The Commission expects to adopt 
the revised BAT Conclusions in late 2021 or early 2022. 

the  IED 

Although  regulating  GHG  emissions  is  not  a  primary  objective  of  the  Industrial  Emissions 
Directive47  (IED),  standards  set  by  the  Directive  impose  emissions  prevention  or  reduction 
techniques  to  steel  producers,  which  may  affect  also  CO2  levels.  The  recent  evaluation48 
concluded  that  the  IED  was  effective  in  curbing  pollution  from  industrial  installations, 
especially to air, but that it was less effective on issues concerning decarbonisation, efficient 
use of energy and raw materials or waste management. The Commission is currently revising 
EU  rules  on  industrial  emissions49,  recognising  that  the  same  new  technologies  will  often 
allow reducing  emissions of both  pollutants and greenhouse  gases. The revision will aim to 
accelerate the uptake of circular economy and the zero-pollution innovation, and the Industrial 
Emissions  Innovation  Observatory  will  play  a  key  role,  monitoring  innovations  and 
accelerating the identification of new techniques that may qualify as BAT. 

A  first  online  stakeholder  workshop  took  place  on  15  December  2020.  The  Online  Public 
Consultation and the Targeted Stakeholder Consultation ended in March 2021 and the results 
will feed into the impact assessment. 

Decarbonisation  roadmaps  for  the  sector  show  a  high  potential  for  future,  innovative 
technologies,  possibly  leading  to  a  step  change  in  terms  of  GHG  emissions  by  2050. 
Generally, their deployment would have a positive direct impact on air emissions, particularly 
of NOx and SOx.  

4.2.6  Construction Products Regulation  

45 6 Mandate M/478 - Standardisation mandate to CEN, CENELEC and ETSI for the development of EU technical standards 
in the field of greenhouse gas emissions   
46  Assessment  and  summary  of  Member  States’  reports  under  Commission  Implementing  Decision  2018/1135/EU  EU27 
horizontal analysis; Final report. 
47 Directive 2010/75/EU 
48 Wood (2021): Wider environmental impacts of industry decarbonisation, final study report 
49 Directive 2010/75/EU and Regulation (EC) No 166/2006  

21 

 
                                                 
Construction, buildings and engineering  works are a major customer of the steel industry as 
they  use  around  50%  of  all  steel  consumed  in  Europe.  Structural  steel  products  used  in 
construction  works  must  comply  with  the  CPR  provisions  and  are  subject  to  harmonized 
European standards.  

The Commission is reviewing the CPR. This review is looking at developing environmental 
performance requirements for construction products with a view to finding a unified method 
to  establish  the  environmental  footprint  of  all  construction  products  in  line  with  horizontal 
principles  set  in  the  Sustainable  Product  Initiative.  The  Commission  is  developing  this  in 
consultation with industry and Member States. Structural steel products will be one of the first 
families of products analysed for these new harmonized technical specifications. The adoption 
of the revised CPR proposal is expected in late 2021 or early 2022. 

4.2.7  Sustainable Products Initiative  

The  Circular  Economy  Action  Plan  announced  that  the  Commission  would  come  forward 
with  a  legislative  proposal  (the  Sustainable  Products  Initiative,  ‘SPI’)  to  increase  product 
sustainability in the EU.  

The  central  focus  of  SPI  will  be  to  extend  the  scope  of  the  Eco-design  Directive,  and 
eventually  propose  additional  legislative  and  non-legislative  measures  to  address  objectives 
that could not be achieved through the revision of the Ecodesign legislation. 

The  Circular  Economy  Action  Plan  identifies  steel  as  one  of  the  priority  product/material 
groups with untapped potential for circularity, along with electronics, ICT, textiles, furniture, 
as well as other intermediate products such as cement and chemicals. Steel has great potential 
to contribute to a climate neutral EU since it is a naturally long-lasting and durable product, 
well adapted for recycling, reuse and remanufacture. 

The  Commission  is  looking  into  how  the  SPI  and  sectoral  legislation  can  support  efforts  to 
become more circular. In particular, having steel in scope of the SPI will steer the definition 
of agreed sectoral rules for the calculation and communication (via a digital product passport) 
of life cycle environmental footprint, other environmental characteristics like recyclability and 
recycled  content,  and  social  information/indicators  for  steel  and  steel-based  products.  This 
may  lead  to  the  definition  of  classes  of  environmental  performance,  and  to  measures  to 
promote  the  uptake  of  low-carbon  and  sustainable  steel  in  the  EU  market(s),  including 
through minimum sustainability requirements in public procurement.  

4.2.8  Public Procurement  

Public procurement accounts for a large proportion of European consumption (nearly 15% of 
EU GDP), especially in sectors like construction, energy and telecommunications.  

Green public procurement can help to create demand for clean products, like green steel, and 
green  value  chains.  It  is  shifting  towards  a  life-cycle  costing  approach,  including  trade-offs 
between  production  and  use-phase  emissions.    There  are  substantial  differences  in  the 
openness of public procurement markets worldwide, which is relevant for the steel sector. To 
combat  the  spread  of  discriminatory  buy  national  practices,  it  is  necessary  to  promote 
openness  and  reciprocity  in  global  procurement.  In  2016,  the  Commission  revised  its 
legislative  proposal  for  an  International  Procurement  Instrument  (IPI).  It  aims  to  open  third 
countries’  markets  by  creating  leverage  in  negotiations  on  procurement.  It  involves  the 
investigation of measures impairing the access of EU companies to third country procurement 
markets and consultation to remove such barriers. If consultations are unsuccessful, IPI could 
lead  to  the  adoption  of  restrictive  measures  on  relevant  third  country  operators,  goods  and 
services  in  EU  procurement  procedures.  In  the  2019  EU-China  Communication,  the 
Commission called (under Action 6) for adoption of IPI. The European Council also called in 

22 

 
 
October  2020  for  accelerating  the  work  on  IPI.  A  swift  agreement  on  the  proposed 
International  Procurement  Instrument  will  be  essential  to  address  lack  of  reciprocity  and  to 
give the EU further leverage in negotiations.  

4.3

 Global supply chains 

4.3.1  Need for a global level playing field   

EU steel producers face challenges related to the absence of a level playing field with regard 
to subsidies,  unwarranted  trade  tariffs  and  global  overcapacity. Exports  of  the  EU  steel 
industry  have  declined  by  more  than  a  quarter  between  2017  and  2020,  mainly  due  to 
protectionist measures adopted by its trading partners as well as to trade diversions resulting 
from those measures. The Covid-19 crisis has exacerbated this negative trend. 

On the import side, the EU’s trade defence instruments play an important role in restoring a 
level playing field on the EU market. Notably the steel industry has in the last years, in line 
with  China’s  rapidly  growing  steel  capacity,  seen  an  increase  in  imports  of  dumped  and 
subsidised steel.   

The EU has countered this with resolute use of trade defence instruments to level the playing 
field.  The EU steel  industry benefits  from  a large number of  anti-dumping and anti-subsidy 
measures.  About  one  third  of  all  TDI  measures  concern  distorted  and  injurious  imports  of 
steel products, notably from China. Of the 55 trade defence measures in  place on steel over 
half (28) concern imports of steel from China. Overall, the trade defence measures in place on 
steel protect 197.000 direct jobs, out of a total number of almost 445.000 direct industrial jobs 
shielded by TDIs across all sectors.  

TDI  measures  have  proven  to  be  highly  effective:  imposition  results  usually  in  substantial 
decrease or complete disappearance of unfair imports50. At the end of 2018, for cases opened 
as from 2015, the average decrease in injurious imports for steel products under measures was 
close to 90 %. At the same time, statistics show that in the chain of supply, unfair imports are 
usually replaced by EU  production and/or imports that are not  dumped or subsidised. Thus, 
AD  and  AS  duties  restore  the  level  playing  field  (both  for  the  EU  producing  industry  and 
other third country suppliers), allowing EU users to continue enjoying diversified sources of 
supply.  

The  EU  has  also  increased  its  use  of  the  anti-subsidy  instrument  to  address  new  forms  of 
harmful subsidisation. For instance, by countering different and new types of State support in 
China  used  to  build  up  capacities  abroad  (so-called  transnational  subsidies,  ‘Belt  &  Road’ 
initiative). After changes to the trade defence legislation in 2017 and 2018, the EU can impose 
measures faster and suspend the lesser duty rule in certain circumstances, possibly leading to 
higher  measures.  The  revamped  instruments  also  allow  the  EU  to  address  certain 
environmental  concerns,  such  as  the  level  of  environmental  protection  when  selecting  a 
representative  country  and  adding  the  EU  industry’s  prospective  cost  of  environmental 
regulation when assessing injury. 

The situation of the steel sector has been further disrupted by the US Section 232 measures, 
which saw the imposition in March 2018 of 25 % duties on imports of foreign steel. The US 
action  made  the  EU  market  vulnerable  to  a  potential  trade  diversion  of  steel  products 
otherwise destined for the US market.  

50 E.g. in the case of seamless pipes from China by 98%, of steel rebars from Belarus by 86%, of stainless steel tube fittings 
from China and Taiwan by 81%, of corrosion resistant steels from China by 100%, of heavy steel plate from China by 99%. 
At  the  end  of  2018,  for  cases  opened  as  from  2015,  the  average  decrease  in  injurious  imports  for  steel  products  under 
measures was close to 90%. 

23 

 
                                                 
To  prevent  economic  damage  to  the  EU  steel  producers  from  the  trade  diversion,  the 
Commission  introduced  provisional  safeguard  measures  in  July  2018  on  imports  of  certain 
steel products and then definitive measures in February 2019 for a period of three years, i.e. 
until  30  June  2021.  The  safeguard  measure  has  been  effective.  Imports  went  down  from  a 
peak of 33.4 million tonnes in 2018, to 28,8 million tonnes (-13,3%) in 2019, which was the 
first  full  year  covered  by  the  measure.  In  June  2020,  the  Commission  further  adjusted  the 
functioning  of  the  measure  to  ensure  that  it  remained  effective  in  a  changing  economic 
context, largely impacted by the COVID-19 pandemic.  

A  safeguard  measure  is  an  extraordinary  short-term  measure  to  provide  interim  relief  to  a 
sector (in this case steel) in the form of protection against imports for a limited period, while 
other medium and longer term measures are designed and implemented to ensure its viability. 
The current safeguard measure takes the form of tariff-rate quotas on 26 categories of steel. 
The  Commission  is  currently  investigating,  following  a  substantiated  request  from  12 
Member States, whether the measure should be prolonged beyond its current expiry date, 30 
June 2021  

4.3.2  International partnerships 

The Global Forum on Steel Excess Capacity (GFSEC), launched by the G20 in 2016, works 
to  address  the  problem  of  global  excess  capacity  by  tackling  distortive  government  policies 
and measures that contribute to it. The GFSEC has agreed a set of principles to address global 
overcapacity,  including  the  issue  of  trade  distorting  state  interventions.  The  next  step  is  to 
ensure that all producing economies apply these agreed principles. 

The EU continues to be active in the GFSEC, to promote and further develop its principles, 
and to retain its relevance by reengaging China, which decided to leave the GFSEC in 2019. 
The  OECD  Steel  Committee  provides  another  valuable  forum  for  addressing  the  global 
problems of the sector. 

The EU will also actively contribute to the G7’s work on resilience within the newly founded 
Economic  Resilience  Panel  and  promote  industrial  decarbonisation  as  a  key  area  for  closer 
cooperation among G7 countries. With the economic weight of this group, representing about 
half  of  the  world’s  GDP,  there  is  a  real  chance  to  motivate  a  critical  mass  of  companies  to 
invest  into  low-carbon  technologies  in  hard-to-abate  sectors,  through  instruments  such  as 
carbon pricing, product standards and public procurement.  

The EU is also a member of Mission Innovation, a global initiative of 25 countries dedicated 
to  achieving  the  objectives  of  the  Paris  climate  agreement  through  clean  energy  innovation 
and doubling public investment in this area within 5 years.  

24 

 
 
5.

  The social dimension and skills  

With  330,000  jobs  in  the  steel  industry  itself  and  many  more  indirectly  induced,  steel  is  as 
much a social and employment factor as an economic one. Experiences of deindustrialisation 
due  to  automation  and  foreign  competition  still  weigh  on  many  communities  and  regions 
centred around classical manufacturing industries. To avoid a repetition of such experiences 
in  light  of  the  new  mega-trends  of  decarbonisation  and  digitalisation,  European  companies 
have  to  be  ahead  of  the  curve  and  workers  have  to  be  equipped  with  the  right  skills  while 
enjoying  adequate  working  conditions.  Given  the  challenging  business  environment  in  the 
steel sector, the Commission will keep a close eye on developments, use the instruments at its 
disposal,  and  support  Member  States  in  anticipating  and  easing  transitions51with  a  view  to 
minimising adverse social impacts. 

Social dialogue 

The steel sector has a long history of social dialogue at the European level. The Consultative 
Committee of the European Coal and Steel Community (ECSC), which existed between 1952 
and 2002, convened producers, workers, consumers and dealers in the coal and steel sectors. 
After  its  expiry,  a  Sectoral  Social  Dialogue  Committee  for  Steel  was  founded.  In  this 
framework,  the  European  trade  union  federation  IndustriAll  Europe  and  the  European  Steel 
Association Eurofer, work together to represent the workers and employers in the steel sector. 
The SSDC’s mission is to monitor the social, economic and employment consequences of EU 
policies  on  the  steel  sector  and  to  represent  the  interests  of  social  partners  in  the  political 
process.  For  example,  the  SSDC  has  in  recent  years  participated  in  the  Commission’s 
consultations on steel safeguards and anti-dumping and anti-subsidy cases, contributed to the 
“Masterplan for a competitive transformation of EU energy-intensive industries”52 and started 
analytical  work  on  the  potential  impact  of  “Industry  4.0”  on  employment  and  skills  in  the 
steel sector.53 As regards restructuring strategies, the importance of coupling them with strong 
re- and upskilling policies can be recalled. Considerable amounts of EU funding are available 
to  address  the  adverse  effect  of  the  social  impact  of  restructuring,  with  the  main  Union 
instrument being the European Social Fund (ESF). 

Social dialogue would be key in transitioning towards clean and competitive European steel, 
to map-out the new skills needed by companies in the sector and support workers in acquiring 
them. 

Skills 

The  Commission  has  put  a  “Pact  for  Skills”  high  on  its  European  Skills  Agenda.54  The 
Agenda and its Pact for Skills respond to the first principle of the European Pillar of Social 
Rights and are anchored in the New Industrial Strategy. The Pact aims to mobilise public and 
private  organisations  to  join  forces  so  that  they  can  take  effective  upskilling  and  reskilling 
actions for people of working age.  

Steel  companies,  workers,  national,  regional  and  local  authorities,  social  partners,  industry 
organisations,  vocational  education  and  training  providers,  chambers  of  commerce  and 
employment services should all play a key role in the Pact for Skills. Only by joining forces, 
making  concrete  commitments  to  invest  in  training  for  the  workforce  and  building  on  the 

51 with targeted policies and effective measures such as those set out in the Commission Recommendation on an 
effective active support to employment following the COVID-19 crisis (EASE) 
52 https://op.europa.eu/en/publication-detail/-/publication/be308ba7-14da-11ea-8c1f-01aa75ed71a1  
53 
https://news.industriall-
europe.eu/content/documents/upload/2020/9/637350989319666309_Steel%20social%20partner%20work%20programme%2
02020_21.pdf  
54 COM/2020/274 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0274  

25 

 
                                                 
results of the ongoing Blueprint Skills Alliances,55 can substantial progress be made towards 
meeting the industry’s skills needs. To make sure that the Pact takes shape with the relevant 
partners, the Commission has begun a series of high-level discussions with representatives of 
industrial  ecosystems,  regional  and  national  authorities,  social  partners  and  education  and 
training providers. 

Under  the  Digital  Europe  Programme,  the  Commission  is  supporting  the  reskilling  and 
upskilling of workers through short-term courses in advanced digital skills. Furthermore, the 
SME strategy supports the ‘digital volunteers’ programme to promote the transfer of expertise 
in digitalisation from high-tech businesses to more traditional SMEs. The Covid-19 crisis has 
accelerated  structural  labour  market  trends,  including  digitalisation.  Policies  supporting 
workers in the steel industry in acquiring these relevant skills would help to ensure a job-rich 
recovery. 

Regions in transition 

The transition to a climate-neutral economy will have a significant economic and employment 
impact  on  regions  with  important  carbon-intensive  industries.  However,  the  distributional 
impact  on  vulnerable  groups  and  regions  stemming  from  transitional  policies  could  be 
alleviated by solidarity mechanisms, revenue recycling and financial measures. 

The Just Transition Mechanism (JTM) seeks to leave no region behind in the context of the 
European Green Deal. It will mobilise up to EUR 100 billion in the next decade. As part of 
the JTM, the Just Transition Fund (JTF) will invest EUR 17.5 billion in the territories most 
negatively affected by the transition.    

In the 2020 European Semester Country Reports, the Commission proposed the steel sector as 
one of the priorities of JTF support in six Member States.56 The JTF can invest in economic 
diversification and reconversion, deployment of new technologies, upskilling and reskilling of 
workers, to overall support the decarbonisation of the industry.    

The JTF complements investments  from  the European Regional Development Fund and the 
European Social Fund Plus to support a smart economic transformation and a more inclusive 
economy.   

skills  Blueprint 

55  Work  on  a 
https://skillspanorama.cedefop.europa.eu/en/useful_resources/blueprint-sectoral-cooperation-skills-steel  
56 Belgium (Hainaut), France (Bouches-du-Rhône, Nord), Italy (Taranto), Luxemburg (Esch-sur-Alzette), Slovakia (Košice) 
and Sweden (Upper Norrland) 

is  ongoing:  https://www.estep.eu/essa/essa-project/, 

sector 

steel 

the 

for 

26 

 
 
                                                 
6.

  Conclusion  

The steel sector shows that this important part of the EU industrial landscape must transform 
itself in order to stay competitive, create quality jobs and a first mover advantage in terms of 
technological  transformation.  Many  EU  policies  already  support  the  transformation  of  the 
steel  sector,  other  energy-intensive  industries  and  manufacturing  industry  more  generally. 
Other  policies  and  EU  funding  are  on  their  way,  but  may  take  time  to  become  fully 
operational.  

The  EU  steel  sector  faces  a  challenging  period  as  it  recovers  from  the  economic  impact  of 
COVID-19, while confronting internal and external challenges. It will be important to ensure 
that this critical sector for so many parts of the EU economy remains strong and able to invest 
in transforming itself to become climate-neutral and circular, in line with the ambitions of the 
EU Industrial Strategy.   

27