The European Steel Association (Eurofer) has proposed a Green Deal on steel and matching support measures for the steel industry and its value chains such as automotive and construction. The Green Deal is core to the EU Commission’s Recovery Plan from COVID-19.
Axel Eggert, director general of Eurofer said the green transition and digital transformation were essential components of the Recovery Plan developed by the EU Commission.
As designed though, the positive effects of the Recovery Plan will only materialize in one to five years or more. The association has urged the EU Council to review EU steel safeguards and address the immediate needs to support and stabilize the steel value chain especially against unfair imports. Eggert noted the need to significantly reduce tariff-free import quotas.
He stated the move to decarbonization will require significant investment in new technologies in this decade and beyond. Capital and operational costs to produce steel will also rise because of using green energy and matching input materials, requiring a combination of financing support and regulatory measures.
Green Deals have been under discussion for years in the EU but being part of the Recovery Plan seems more specific. The investment is estimated at €1tn (£910bn) with half of the investment coming from the EU budget, a third from the private sector, incentivized by loan guarantees, and the remainder from national governments.
Under the Green Deal, the EU steel industry could be empowered to reduce its direct and indirect CO2 emissions by up to 30pc by 2030 beyond the 25pc emission reductions achieved between 1990 and 2018. The steel industry aspires to reduce emissions by 80-95pc by 2050.
The EU steel industry has a turnover of close to €170bn, directly employs 330,000 people, and produces about 160mn mt of steel annually through more than 500 steel sites in Europe.
According to worldsteel, crude steel production in the EU was estimated to be 10.7mn mt in April 2020, down 22.9pc from April 2019. The last two COVID-19 influenced months of March and April were stark contrasts compared to February when worldsteel reported almost flat production compared to February of the previous year.
($1= €0.91)