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EUROFER Welcomes European Commission Steel Action Plan

06/11/2013 - EUROFER welcomes the “Action Plan for a competitive and sustainable steel industry in Europe” published on 11 June 2013 by the European Commission.

“It is good to see that the Commission considers a strong and competitive steel sector as essential for the Union’s industrial and economic base. The Action Plan is a good starting point but there still is a lot of work to be done until our sector will substantially benefit from the proposals,” said Gordon Moffat, director general of the European Steel Association.
Amongst other things, the Action Plan takes a comprehensive view of energy and energy-efficiency issues and states creating a “regulatory environment conducive to sustainable growth” in this area as one of its central goals. Measures suggested include guidance on long-term electricity contracts, which could reduce energy costs for the steel industry, and an analysis of the impact of the EU Emissions Trading Scheme on electricity prices. Other levies and taxes boosting electricity cost will also be looked into, and Member States are invited to consider reduction of renewable and network levies for energy-intensive industries (EII) or to exempt EII from these altogether. “These are positive signals,” Moffat commented.
On climate policies post-2020, the Action Plan highlights the need to find a technological and economic basis for the EU target of reducing CO2 emissions by 80–95% by 2050. “Independent studies from Boston Consulting Group and from the Joint Research Centre, a part of DG Research, have demonstrated clearly that the steel industry can reduce its emissions up to 2050 by only another 15%. Present technology has reached its limits,” Moffat explained.
Trade and innovation
With 40% of global industrial raw material export restrictions pertaining to various steel making raw materials and 65% of global steel trade affected by protectionist measures, trade policies also play a prominent role in the Action Plan. New short time measures include the introduction of coking coal into the Commission’s list of critical raw materials which are subject to a higher risk of supply interruption, as well as scrap market monitoring. “Scrap is an important raw material for steel production. What gives rise to concerns here is the fact that Europe has become the second largest scrap exporter in the world while at the same time there are more than 20 countries elsewhere in the world that impose export restrictions on their own scrap production”, said Moffat.
Furthermore, the Commission wants to support innovation in the steel industry, for instance in the framework of EU Horizon 2020 program. Research and development (R&D), demonstration and pilot projects for cleaner, more resource and energy-efficient technologies are focused on. Also, the Commission will concentrate financial support more on the up-scaling and piloting phase of new technologies instead of supporting the R&D phase only.
Moffat commented, “This is a sensible move, for instance when you look at potential breakthrough technologies for low-carbon steelmaking the European steel industry has identified. Up-scaling these to demonstration and large-scale pilot plants to learn more about their industrial viability will need considerable funding.” The Commission also invites Member States to earmark funds for specific R&D projects in the steel sector and the European Investment Bank to consider long-term financing applications for steel projects undertaken to ensure compliance of the industry’s installations with the EU Industrial Emissions Directive.
Employment and legislation
With respect to employment, the European steel industry has to manage both the social challenges of ongoing restructuring and the need for young and creative talent. The Commission intends to mobilize various policy instruments such as the European Social Fund and the European Globalisation Fund to alleviate the social cost of adjustment. At the same time, it will promote the employment of young people in the sector, encourage the creation of a European Skills Council for the steel industry and support Sector Skills Alliances through its Erasmus for All program.
EUROFER welcomes that the Action Plan takes a comprehensive look at European legislation as well, acknowledging therewith that the cumulative effects of various policies can have an impact on an industry’s ability to invest, to innovate and to compete successfully on a global level.
The Commission will also look into potential competitive benefits of European standards, for instance on sustainable production. It cites SustSteel, the EUROFER certification scheme for sustainable steel construction products as a positive example for such an approach.
The “Action Plan for a competitive and sustainable steel industry in Europe” takes up recommendations of the High level Roundtable (HLR) on the Future of the European Steel Industry. Initiated by Antonio Tajani, commissioner for Industry and Entrepreneurship with support from László Andor, commissioner for employment, social affairs and inclusion, the HLR brought together representatives of the governments of 13 member states, commission directorates-general, executive board members and chief executive officers of EUROFER member companies as well as representatives from trade unions. The Commission proposes to institutionalize a High-Level Group on steel, which would meet once a year to provide a European platform for dialogue and exchange of best practice.
Represented by EUROFER, the European steel industry is a world leader in its sector with a turnover of € 170 billion and direct employment of 360,000 highly skilled people, producing on average 190 million tonnes of steel per year. More than 500 steel production and processing sites in 23 member states of the European Union provide direct and indirect employment and a living for millions of European citizens.