EU may trigger clause to boost defense spending

Spanish Market: Crude oil, Metals, Natural gas, Oil products
15/02/25

European Commission president Ursula von der Leyen wants to trigger an emergency clause that would allow member EU countries to significantly increase their spending on defense. She also warned that "unjust" tariffs on the EU will not go unanswered.

Speaking at the Munich Security Conference on Friday, Von der Leyen said she "will propose to activate the escape clause for defense investments".

Such a move would "allow member states to substantially increase their defense expenditure", she said.

Von der Leyen's proposal would exempt defense from EU limits on government spending. Highly indebted EU members such as Italy and Greece have voiced support for the move, arguing that activating the escape clause would enable them to increase defense spending while avoiding other budget cuts. Fiscally conservative EU countries, including Germany, could push back against the idea.

Von der Leyen's proposal comes at a sensitive time for the EU, with US president Donald Trump pressuring Europe to finance more of its own defense. Trump wants EU members of Nato to more than double military expenditure to protect themselves from potential aggression rather than leaning on Washington's support. Trump is also pushing to end the conflict between Russia and Ukraine.

"Let there be no room for any doubt. I believe when it comes to European security, Europe has to do more. Europe must bring more to the table," Von der Leyen said, adding that the EU needs to increase its military spending from just below 2pc of GDP to above 3pc.

The increase "will mean hundreds of billions of euros of more investment every year", she said.

Tariffs will be answered

Von der Leyen also reemphasized the EU's position on the recent US tariff decision, noting that tariffs act like a tax and drive inflation. "But as I've already made clear, unjustified tariffs on the European Union will not go unanswered," she said.

"And let me speak plainly, we are one of the world's largest markets. We will use our tools to safeguard our economic security and interests, and we will protect our workers, our businesses and consumers at every turn," she added.

Trump on 11 February imposed a 25pc tariff on all US imports of steel and aluminum effective on 12 March, although he said he would consider making an exemption for imports from Australia. US 25pc tariffs on steel and aluminum imports could result in a 3.7mn t/yr decrease in European steel exports, as the US is the second-largest export market for the bloc, European steel association Eurofer said.

By Bachar Halabi

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31/03/25

EU stainless safeguards, metal plan meet mixed reaction

London, 31 March (Argus) — Europe's stainless steel industry has had a mixed reaction to the European Commission's safeguard steel review and its action plan to protect the bloc's metals industry, both announced on 11 March. Steelmakers have welcomed greater commitment from policy makers to support the sector, but are still concerned at a lack of concrete commitment to significant protectionist measures, while traders, service centres and scrap suppliers are worried the most radical proposals could severely damage their businesses. The European Commission's review of definitive safeguard measures on imports of certain steel products identified no new import pressure for stainless cold rolled sheets and strips, and left tariff rate quotas for the next 15 months virtually unchanged even as carryovers and unused quota access were removed. And the commission's European Steel and Metals Action Plan included proposals to curb imports of finished steel and exports of scrap alongside the extension of the Carbon Border Adjustment Mechanism (CBAM) to potentially include raw material exports and downstream products. European stainless steel flat producers — battling weak medium-term demand and a high cost structure — expressed disappointment on the absence of protectionism in the safeguard review through to July 2026, but told Argus they were encouraged by proposals in the Action Plan that acknowledge the need to to curb imports for domestic industry's long term health. "The industry remains threatened by global excess capacities and by global distortions from China and other countries that artificially support their domestic industries or circumvent the current measures," Finnish producer Outokumpu told Argus . "These challenges need to be mitigated with more assertive solutions, including replacing current safeguards with more effective measures from July 2026." European trading groups surveyed by Argus welcomed the stability offered by the unchanged import quotas as the industry navigates other pressures — such as high energy prices and US tariffs — but said they expect lobbying by producers to drive a wave of new measures in the fourth quarter of this year, with stainless steel-specific safeguards likely to be implemented from next year. "Current quotas will only last this year, if you ask me," a trader said. "We expect new regulation to be announced in September/October." A key area of focus for the industry is the possible introduction of the melt-and-pour clause, which determines the origin of goods by the location at which the metal is originally melted, and disregards third countries where further processing may take place for circumvention of anti-dumping duties. The EU stopped short of immediately implementing this clause as part of the Action Plan, and will conduct further assessment of the action. But market participants expect [consultation](https://direct.argusmedia.com/newsandanalysis/article/2670486] on the policy will start after the current safeguard period ends. Several large European stainless steel producers are heard to be importing slab from Asia, and traders told Argus they were relieved that melt and pour is not coming into play this year. A Spanish trader said the clause will level the playing field for European producers, but a hasty implementation this year would have simply added to costs for both producers and consumers in the near term. Outokumpu said it welcomes the melt-and-pour proposals as part of a wider anti-circumvention drive that it said is required in Europe. The EU's Action Plan also calls for the need to address carbon leakage of exported steel through a potential extension of the CBAM to include exports. Trading groups told Argus this will be difficult to implement across the spectrum of trading partners, and may render exports uncompetitive to the detriment of European service centre groups. Outokumpu called upon the need to leverage the EU's competitive advantage by including Scope 2 emissions within any CBAM regulation for downstream products. "It is critical to prevent European steel producers from being placed at a disadvantage from imports with higher emissions from energy usage," the group said. "Outokumpu uses low-carbon energy across its operations with a high-recycling rate, so a fair benchmark definition is necessary to ensure that our low-emission production receives the competitive advantage it deserves." The EU's action plan also proposes the potential introduction of export duties for all steel scrap in order to limit scrap leakage from the bloc. Stainless steel scrap traders surveyed by Argus said there was no chance such a move would ever be implemented as Europe simply cannot consume all the scrap it produces, and that recyclers use exports to keep prices at a level that encourages further investment. "We would drown in scrap if exports fell," a trader said. "Prices would decrease sharply and work like a subsidiary for an antique industry. High-end recycling plants need high prices to process complex materials which would end up in landfill otherwise. No investments would be made if prices are pushed into the ground." Trade bodies BIR and EuRIC suggested a more rational move could be to introduce mandatory recycled content targets for metals products that incentivises domestic demand and usage for scrap, while also allowing scrap to move freely to export markets. By Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Global energy mix evolves as electricity demand surges

28/03/25

Global energy mix evolves as electricity demand surges

Climate change is becoming a bigger factor behind electrification, but cleaner energy use is slowing the growth in global emissions, writes Georgia Gratton London, 28 March (Argus) — A substantial increase in electricity demand — boosted by extreme weather — drove an overall rise in global energy demand in 2024, lifting it well above the average pace of increase in recent years, OECD energy watchdog the IEA announced this week. This led to a rise in natural gas consumption, although renewables and nuclear shouldered the majority of the increase in demand, leaving oil's share of total energy demand below 30pc for the first time. Global energy demand rose by 2.2pc in 2024 compared with 2023 — higher than the average demand increase of 1.3pc/yr between 2013 and 2023 — according to the Paris-based agency's Global Energy Review . Global electricity consumption increased faster, by 4.3pc, driven by record-high temperatures — that led to increased cooling needs — as well as growing industrial consumption, the electrification of transport and the rapid growth of power-hungry data centres needed to support the boom in artificial intelligence, the IEA says. Renewables and nuclear covered the majority of growth in electricity demand, at 80pc, while supply of gas-fired power generation "also increased steadily", the IEA says. New renewable power installations reached about 700GW in 2024 — a new high. Solar power led the pack, rising by about 550GW last year. The power generation and overall energy mix is changing, as economies shift towards electrification. The rate of increase in coal demand slowed to 1.1pc in 2024, around half the pace seen in 2023. Coal remained the single biggest source of power generation in 2024, at 35pc, but renewable power sources and nuclear together made up 41pc of total generation last year, IEA data show. Nuclear power use is expected to hit its highest ever this year, the agency says. And "growth in global oil demand slowed markedly in 2024", the IEA says, rising by 0.8pc compared with 1.9pc in 2023. A rise in electric vehicle (EV) purchases was a key contributor to the drop in oil demand for road transport, and this offset "a significant proportion" of the rise in oil consumption for aviation and petrochemicals, the IEA says. Blowing hot and coal Much of the growth in coal consumption last year was down to "intense heatwaves" — particularly in China and India, the IEA found. These "contributed more than 90pc of the total annual increase in coal consumption globally", for cooling needs. The IEA repeatedly noted the significant effect that extreme weather in 2024 had on energy systems and demand patterns. Last year was the hottest ever recorded, beating the previous record set in 2023, and for CO2 emissions, "weather effects" made up about half of the 2024 increase, the watchdog found. "Weather effects contributed about 15pc of the overall increase in global energy demand," according to the IEA. Global cooling degree days were 6pc higher on the year in 2024, and 20pc higher than the 2000-20 average. But the "continued rapid adoption of clean energy technologies" restricted the rise in energy-related CO2 emissions, which fell to 0.8pc in 2024 from 1.2pc in 2023, the IEA says. Energy-related CO2 emissions — including flaring — still hit a record high of 37.8bn t in 2024, but the rise in emissions was lower than global GDP growth. Key "clean energy technologies" — solar, wind and nuclear power, EVs and heat pumps — collectively now prevent about 2.6bn t/yr CO2 of emissions, the IEA says. But there remains an emissions divide between advanced and developing economies. "The majority of emissions growth in 2024 came from emerging and developing economies other than China," the agency says, while advanced economies such as the UK and EU cut emissions last year and continue to push ahead with decarbonisation. Global energy suppy by fuel EJ Growth ±% 2024 2023 2022 24/23 23/22 Total 648 634 622 2.2 1.8 Renewables 97 92 89 5.8 3.1 Nuclear 31 30 29 3.7 2.2 Natural gas 149 145 144 2.7 0.7 Oil 193 192 188 0.8 1.9 Coal 177 175 172 1.2 2.0 Global power generation by fuel TWh Growth ±% 2024 2023 2022 24/23 23/22 Total 31,153 29,897 29,153 4.2 2.6 Renewables 9,992 9,074 8,643 10.0 5.0 Nuclear 2,844 2,743 2,684 3.7 2.2 Natural gas 6,793 6,622 6,526 2.6 1.5 Oil 738 762 801 -3.2 -4.8 Coal 10,736 10,645 10,452 0.9 1.8 Global power generation by country TWh Growth ±% 2024 2023 2022 24/23 23/22 World 31,153 29,897 29,153 4.2 2.6 US 4,556 4,419 4,473 3.1 -1.2 EU 2,769 2,718 2,792 1.9 -2.6 China 10,205 9,564 8,947 6.7 6.9 India 2,059 1,958 1,814 5.2 7.9 Global CO2 emissions by country mn t Growth ±% 2024 2023 2022 24/23 23/22 World 37,566 37,270 36,819 0.8 1.2 US 4,546 4,567 4,717 -0.5 -3.2 EU 2,401 2,455 2,683 -2.2 -8.5 China 12,603 12,552 12,013 0.4 4.5 India 2,987 2,836 2,691 5.3 5.4 *includes industrial process emissions — IEA Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US consumer confidence down on policy angst

28/03/25

US consumer confidence down on policy angst

Houston, 28 March (Argus) — The University of Michigan's gauge of consumer sentiment fell in March to the lowest level since November 2022, led by a slump in expectations over the "potential for pain" from US economic policies introduced by the new administration. Sentiment fell to 57, down from 64.7 in February and 79.4 in March 2024, according to the University of Michigan's consumer sentiment survey released Friday. The final reading for March was lower than the preliminary reading. The sentiment index fell to a record low of 50 in June 2022 on inflation concerns. The index of consumer expectations fell to 52.6, the lowest since July 2022, from 64 in February and 77.4 in March last year. The expectations index has lost more than 30pc since November last year. "Consumers continue to worry about the potential for pain amid ongoing economic policy developments," the survey director Joanne Hsu said. The decline "reflects a clear consensus across all demographic and political affiliations: Republicans joined independents and Democrats in expressing worsening expectations … for their personal finances, business conditions, unemployment and inflation," Hsu said. Current economic conditions slipped to 63.8 in March from 65.7 in February and 82.5 last March. Two thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. Year-ahead inflation expectations jumped to 5pc this month, the highest reading since November 2022, from 4.3pc last month. The University of Michigan survey comes three days after The Conference Board's preliminary Consumer Expectations Index fell in March to its lowest in 12 years, to below a threshold that "usually signals" a recession. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

ISCC aware EU mulling certification recognition: Update

28/03/25

ISCC aware EU mulling certification recognition: Update

Adds comment from the European Commission London, 28 March (Argus) — The ISCC, an international certification system for sustainability, said today that it is aware of discussions in an EU committee about future recognition of its certification for waste-based biofuels. It said there is no legal basis for any planned measures. Industry participants said yesterday that the EU Committee on Sustainability of Biofuels, Bioliquids, and Biomass Fuels is drafting implementing regulations that would include a two-and-a-half year pause to obligatory acceptance of ISCC EU certification for waste-based biofuels. "This action is said to be subject to further legal scrutiny and will need approval by member states," the ISCC said. Currently, member states accept EU-recognised voluntary scheme certification as proof that fuel or feedstocks are compliant with the bloc's Renewable Energy Directive (RED) sustainability criteria. Market participants told Argus that discussions have centred around giving individual countries more choice. "Other voluntary schemes would not be able to fill the gap. The measure would be a severe blow to the entire market for waste-based biofuels and would seriously jeopardise the ability of the obligated parties to comply with blending mandates," the ISCC said. The ISCC has been singled out in a discriminatory way and has supported European Commission and member states' investigations into alleged fraud, it said. "We are more than surprised by this step […and] are unable to see the rationale of the planned measure, which seems ad hoc and baseless," it added. Secretary-general of the European Biodiesel Board (EBB) Xavier Noyon told Argus that, if confirmed, the suspension would affect thousands of operators. "At this time, member states are refusing to comment, and we call on the commission to urgently clarify any decisions of this nature that are on the table," he said. The EBB published its own proposed revision to the RED implementing legislation last month, which expanded the supervisory power of member states over voluntary schemes and certification bodies. The European Commission confirmed that the committee met on 26 March to discuss sustainable certification, promotion of biofuels, avoidance of double counting, and alleged fraud. "We are still working on our examination of this alleged fraud in biodiesel imports from China," said commission energy spokesperson Anna-Kaisa Itkonen. But the commission has not taken any decision yet and cannot allude to "possible" scenarios, she said. By John Houghton-Brown, Simone Burgin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK steel importers oppose other countries' caps

28/03/25

UK steel importers oppose other countries' caps

London, 28 March (Argus) — Steel importers in the UK suggest the imposition of a cap on any other countries' quotas could effectively stop trade, given the small volume of the quotas. In a recent submission to the Trade Remedies Authority, UK Steel said 15pc caps should be introduced on other countries quotas for hot-dip galvanised, plate and rebar. But in its submission to the TRA, trading firm Salzgitter Mannesmann argues that any cap based on a percentage of the quota "will ultimately most likely remove rather than reduce imports as shipments from many third countries, notably the far east, require a certain base volume to ship economically to the UK". Other trading firms and service centres told Argus they share the same view. Salzgitter Mannesmann also suggested a new country quotas for individual importers be added to the safeguard based on their imports over the past two or three years. The only local producer of hot-dip galvanised coil, Tata Steel, would be likely to argue against this as volumes from some countries, notably Vietnam, have increased dramatically in recent years. Salzgitter Mannesmann also suggests Tata Steel cannot produce hot-rolled coil over 1.85m wide, for which the UK has to totally rely on imports. Traders have for some time argued that there should be no import constraints on material, such as 2m wide, as there can be no injury to the producer on grades it cannot produce. Service centre Sebden Steel said the current measures make it "impossible" for the UK to be flooded with cheap foreign imports, and that people are "misinformed by mainstream media and UK Steel". "The UK producer is in a safe place already and any additional measures will only serve to cause injury to independent steel service centres, independent steel stockholders and the UK manufacturing base, which will all be faced with a further tightening of the supply chain and increased costs," it said. Importers, unsurprisingly, question why Tata Steel, now a re-roller until its electric arc furnaces are installed, can import on much more favourable terms than others. Tata has a much bigger quota than the rest of the market, at around 2.3mn t, but the main problem for importers is that the company has fewer constraints on where it can source, with only a 40pc cap on any given country within that quota. Independent service centres, which all compete with Tata Distribution, can only import much smaller quantities from different locations, given the fragmented composition of quotas; the other countries quota for 1A, for example, is less than 100,000 t/yr. EU mills have far and away the largest quota to sell 1A HRC into the UK, but given their higher costs compared with Asian producers, they struggle to compete; Tata's imports come from all over the world, as well as some from its sister mill in IJmuiden, the Netherlands. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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