The European Commission took action today (March 19, 2025) to protect and expand European industrial capacities in the steel and metals sectors. The Commission unveiled the Steel and Metals Action Plan, designed to strengthen the sector's competitiveness and secure its future. With this Action Plan, the Commission aims to help industries overcome current challenges in the short and medium term. The Plan's priority sector-specific measures were shaped as a result of an extensive discussion process and stakeholder engagement. The Steel Dialogue, which took place on March 4, 2025, played an important role in this process. The main objectives of the Action Plan include the following:
Providing Affordable and Secure Energy Supply
The Action Plan encourages the use of Power Purchase Agreements (PPAs) to reduce energy costs and asks Member States to use energy tax flexibility and reduced network tariffs to mitigate energy price volatility. The plan also supports providing faster network access for energy-intensive industries and increasing the use of renewable and low-carbon hydrogen in the sector.
Preventing Carbon Leakage
The Carbon Border Adjustment Mechanism (CBAM) is critical to create a level playing field in the sector. The Commission aims to prevent non-EU industries from “green laundering” their metals based on high-emission energy sources. In the second quarter of this year, the Commission will publish a communication on how it will tackle the problem of carbon leakage for CBAM goods exported from the EU to third countries. It will also present the first legislative proposal to extend the scope of CBAM to steel and aluminum-based downstream products by the end of 2025 and to include additional anti-skipping measures.
Expanding and Protecting European Industrial Capacities
Global overcapacity poses a serious threat to this sector. Although the EU has implemented trade defense measures against unfair competition in steel, aluminum and ferroalloys, the situation is worsening. The Commission will therefore tighten existing steel safeguards. By the end of the year, the Commission will propose a new long-term measure to protect the EU steel sector at high efficiency after the current safeguards expire in mid-2026.
Promoting Transformation
Recycling is critical to reduce emissions and energy use in the metals industry. The Commission plans to set targets for recycled steel and aluminum in key sectors and consider whether more products, such as construction materials and electronics, should carry recycling or recycled content requirements. Furthermore, the Commission will take potential trade measures to ensure trade in metal scrap, which is vital for decarbonized steel.
Mitigating Decarbonization Risks
The forthcoming Industrial Decarbonisation Accelerator Act will introduce durability and sustainability benchmarks for European products and create frontier markets by increasing demand for EU-produced low-carbon metals. The Commission will allocate EUR 150 million through the Research Fund for Coal and Steel in 2026-2027 and an additional EUR 600 million to the Clean Industrial Deal through Horizon Europe. Furthermore, during the scaling-up phase, the Commission is targeting EUR 100 billion through the Innovation Fund and other sources. In 2025, a EUR 1 billion pilot auction will be held for the decarbonization and electrification of key industrial processes.
Protecting Quality Industrial Jobs
The steel and metals industry is critical to the EU economy and directly and indirectly employs around 2.6 million people. Active labor policies will support skills development and fair job transitions, with the European Fair Transition Observatory to monitor impacts on the workforce and the Quality Jobs Roadmap as part of the Clean Industrial Deal.
The Future of Europe's Steel Industry
European Commission President Ursula von der Leyen stated: “The steel industry has always been a core engine for European prosperity. Next-generation, clean steel should therefore continue to be manufactured in Europe. That means we have to help our steelmakers who are facing strong headwinds on the global
market. To make sure they remain competitive, we must reduce energy costs and help them introduce innovative, low-carbon technologies to the market. With today’s Action Plan we are offering concrete solutions for a thriving European steel industry.”
EUROMETAL President Alexander Julius discussed the EU Steel Action Plan in remarks on BBC News. Julius emphasized the critical role of the steel sector and its trade, what new trade policies offer and how to balance sustainability with sustainability in the sector.
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