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【Ferro-alloys.com】: The document, in particular, provides protection against unfair competition and carbon leakage risks

On March 19, the European Commission (EC) unveiled its Steel and Metals Action Plan, which aims to strengthen the sector’s competitiveness and protect its future. This is stated in the press release of the institution.

As noted, the European steel industry is fundamental to the bloc’s economy and to ensuring EU security. At the same time, the EC states that the sector is at a critical juncture, facing high energy prices, unfair global competition and the need for investment to reduce carbon emissions.

“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,” said EC President Ursula von der Leyen.

The Steel and Metals Action Plan includes the following steps.

Ensuring affordable and secure energy supply. The plan encourages the use of power purchase agreements (PPAs). The document calls on member states to use energy tax flexibility and reduced network tariffs to mitigate price volatility. The plan promotes faster access to the grid for energy-intensive industries and supports the increased use of renewable energy and low-carbon hydrogen in these sectors.

Preventing carbon leakage. It is noted that the cross-border carbon adjustment mechanism (CBAM) should ensure a level playing field. It should also ensure that non-EU industrial enterprises do not “greenwash” their metals. The EC intends to present a vision of how to solve the problem of carbon leakage for CBAM products exported from the bloc to third countries in the second quarter. In addition, the Commission will review the mechanism and come up with a first legislative proposal by the end of 2025 that will extend its scope to certain steel and aluminum derivatives and include additional anti-circumvention measures.

Expansion and protection of European industrial capacities. It is noted that the EC is strengthening the current safeguard measures on steel and will propose a new long-term solution by the end of the year, as the current measures expire on July 1, 2026. As previously reported, the EC will also assess the possibility of introducing a “smelted and cast” rule to determine the origin of steel products.

Promoting circularity. The Commission plans to set targets for recycled steel and aluminum in key sectors and assess whether to introduce recycling or recycled content requirements for more products, such as construction materials and electronics. In addition, the EC will consider trade measures on scrap to ensure its availability.

Reducing decarbonization risks. The upcoming Law on Accelerating Industrial Decarbonization will introduce sustainability criteria for European products in public procurement to increase demand for low-carbon metals. The EC will allocate €150 million through the Coal and Steel Research Fund in 2026-2027, and another €600 million will be allocated through Horizon Europe for the Clean Industry Agreement. During the expansion phase, the EC plans to raise €100 billion through the Industrial Decarbonization Bank, using the Innovation Fund and other sources, and to hold a pilot auction for €1 billion in 2025 with a focus on decarbonization and electrification of key industrial processes.

In addition, the plan provides for the protection of quality jobs in industry.

• [Editor:Alakay]