The European Commission today presented its steel and metals action plan, setting out actions to boost the sector's decarbonisation while countering unfair competition from outside the bloc.
The plan has a strong focus on combatting global market distortion, whether in terms of trade or combined with circumvention of the bloc's emissions trading system (ETS) and carbon border adjustment mechanism (CBAM).
"We will strengthen the current safeguard clause. We aim for a reduction of up to 15pc in [steel] imports," said industry commissioner Stephane Sejourne. Aside from revised steel safeguard measures, trade actions include a ferro-alloys safeguards investigation "expeditiously" by 18 November. And the commission promises to assess whether the bloc's use of the lesser duty rule regime requires changes.
In addition to a CBAM scheme for exported goods, the measures also cover energy prices, decarbonisation through electrification and more flexible rules for low-carbon hydrogen. The commission promises revised rules to enable more EU states to provide indirect cost compensation for steel and aluminium firms for carbon costs passed on through electricity bills.
And Brussels wants EU states to lower costs for energy-intensive industries through network tariffs, facilitating power purchase agreements (PPAs) and lowering electricity taxation to zero. With direct electrification not always possible or cost-effective, the commission points to hydrogen as a key enabler of decarbonisation in the steel and metals industries.
Some measures have been toned down from drafts. The commission's plan no longer mentions implementing a melt and pour clause, "effective immediately". The commission will now "assess" whether it should adapt its practice by introducing a melted and poured rule, regardless of the place of subsequent transformation and origins.
But the commission now promises that the delegated act on low-carbon hydrogen will provide rules that are "as flexible as possible" to achieve greenhouse gas emission-reduction goals for low-carbon fuels in a "technology neutral way".
Industry association Hydrogen Europe welcomed the commission's direct acknowledgment of hydrogen as the best route to decarbonisation for primary steel production. "Labelling schemes, sustainability criteria, and dedicated funding mechanisms are necessary first steps to incentivise the offtake of green products," said Hydrogen Europe's industrial policy director Laurent Donceel.
The commission's paper sends a clear message that "a strong European Union needs a strong European steel industry", said Henrik Adam, president of European steel association Eurofer. But the association also called on the EU to implement "meaningful solutions through ambitious measures".
