European steelmakers have again called on the EU to take immediate action to support the industry amid rising energy costs, increasing imports, and strict carbon regulations. With steel demand fluctuating and global competition intensifying, the EU’s steel sector faces challenges that threaten jobs, exports, and the continent’s industrial base.
Introduction: Why the EU Steel Industry Needs Urgent Support
The European steel industry is one of the most vital components of the continent’s economy, employing over 300,000 workers directly and supporting millions more indirectly through supply chains. However, in 2025, the sector faces some of its most difficult challenges yet.
Steelmakers have once again called on the European Union to act quickly, citing risks from:
- Rising energy costs driven by global fuel prices.
- Competition from imports, especially from China, Turkey, and India.
- The EU’s Carbon Border Adjustment Mechanism (CBAM), which while designed for climate goals, has raised compliance costs.
Key Challenges Facing European Steelmakers
1. High Energy Costs
Energy represents nearly 40% of steelmaking costs in the EU. With electricity prices up by 15% in 2025, steel producers struggle to stay competitive globally.
2. Import Competition
Imports of cheaper steel from Asia increased by 12% YoY, undermining EU domestic pricing.
3. CBAM and Carbon Pricing
The EU’s emissions trading scheme (ETS) has raised carbon costs to over €85 per tonne of CO₂, pressuring producers to accelerate the green steel transition.
4. Declining Demand
Demand for construction steel in Europe fell 5% in Q2 2025, driven by a slowdown in housing and infrastructure projects.
Industry Reactions
European steel associations and executives have repeatedly urged policymakers for stronger interventions.
- “We risk losing a strategic industry if the EU does not address competitiveness challenges urgently.” — European Steel Association (EUROFER)
- “Without affordable energy and fair trade, Europe’s steel plants face closures.” — CEO, ArcelorMittal Europe
What Steelmakers Want from the EU
1. Energy Subsidies and Support
- Proposals for reduced electricity tariffs for energy-intensive industries.
- Investments in renewable energy infrastructure for green steel production.
2. Trade Defense Measures
- Stricter anti-dumping duties on steel imports from Asia.
- Stronger enforcement of fair-trade rules under WTO guidelines.
3. Green Transition Funding
- Increased EU funding for hydrogen-based steel projects.
- Subsidies for carbon capture and utilization technologies.
4. Policy Clarity
- Clearer roadmaps for CBAM compliance.
- Simplified carbon credit allocation for sustainable producers.
Global Context
The steel industry is undergoing rapid changes globally. While Europe emphasizes decarbonization, countries like China and India are ramping up low-cost steel production.
- China produced over 1 billion tonnes of steel in 2024, compared to the EU’s ~130 million tonnes.
- India’s steel consumption grew 9% YoY, providing opportunities for exports but also competition.
Outbound link suggestion: World Steel Association
Case Study: Germany and France
- Germany: Facing closures of smaller steel plants due to high energy costs. Thyssenkrupp is lobbying for EU-backed hydrogen steel funding.
- France: ArcelorMittal announced €2.2 billion investment in green steel plants, but needs EU subsidies to sustain competitiveness.
Economic and Social Implications
- Jobs at Risk: EUROFER estimates that over 50,000 jobs could be lost if energy costs remain unaddressed.
- Regional Impact: Countries with older plants (Italy, Spain) risk plant shutdowns.
- Strategic Importance: Steel is essential for EU infrastructure, defense, and renewable energy sectors.
Frequently Asked Questions (FAQ)
Q1: Why are European steelmakers calling for EU action again?
Because rising energy costs, import competition, and CBAM compliance threaten profitability.
Q2: What policies are steelmakers requesting?
Energy subsidies, trade defense measures, and green steel transition funding.
Q3: How does CBAM affect EU steelmakers?
It raises compliance costs by imposing carbon pricing on imports and domestic producers.
Q4: What is the global context for steel production?
Asia, led by China and India, is increasing low-cost steel output, pressuring EU competitiveness.
Q5: What’s the risk if the EU does not act?
Closures of plants, job losses, and loss of industrial self-sufficiency.
Conclusion: A Crossroads for the EU Steel Industry
The European steelmakers’ call for immediate EU action highlights the urgency of policy reform. Without intervention, Europe risks losing its competitive edge to cheaper, carbon-intensive imports.
With the right balance of energy support, trade defense, and sustainability funding, the EU can safeguard its steel industry while advancing towards its climate goals.