The European Commission last week unveiled a bold Action Plan for Steel and Metals, which will deliver comprehensive measures to protect and strengthen the European steel industry. With global overcapacity, coupled with rising energy costs, and new US tariffs and forthcoming trade diversion intensifying pressure, the European Union‘s (EU’s) rapid response highlights the urgency of the moment.
Key measures include:
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Ensure an affordable and secure energy supply for the sectoran affordable and secure energy supply for the sector: Promote the use of Power Purchase Agreements (PPAs), encourage Member States to leverage energy tax flexibility, reduced network tariffs to alleviate electricity price volatility, faster grid access for energy-intensive industries (EIIs) and support the increased use of renewable and low-carbon hydrogen within the sectors.
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Prevent carbon leakage: The Carbon Border Adjustment Mechanism (CBAM) to ensure that non-EU industries do not “greenwash” metals to appear low-carbon while still relying on high-emission energy sources.
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Expand and protect European industrial capacities: The Commission is tightening the current steel safeguards. Before the end of the year, the Commission will propose a new long-term measure once the current EU steel safeguard expires in mid-2026 and will assess the introduction of the “melted and poured rule” to determine the origin of metal goods.
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Promote Circularity: Set targets for recycled steel in key sectors, assess whether more products should have recycling or recycled content requirements. The Commission will evaluate trade measures on metal scrap.
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De-risking decarbonisation: Allocate 150 million euros through the Research Fund for Coal and Steel in 2026-27, with an additional 600 million euros via Horizon Europe devoted to the Clean Industrial Deal. At the scale-up stage, a targeted 100 billion euros through the Industrial Decarbonisation Bank, drawing on the Innovation Fund and other sources, will join with a 1-billion-euro pilot auction in 2025 focusing on decarbonising and electrifying key industrial processes.
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Protect quality industrial jobs: The European Fair Transition Observatory and the Quality Jobs Roadmap, part of the Clean Industrial Deal, will oversee employment impacts, ensuring workers' rights are protected.
Critical opportunityMany of the new EU Commission policies align directly with proposals UK Steel has already put to the Government. The UK must now match this ambition to avoid falling behind. While the Steel Strategy is under careful development, and should run its course, there is a critical opportunity for the UK Government to establish new measures now before it is finalised. For example, to strengthen UK steel safeguard quotas for 1 April, at the same timescale the EU has committed to for its steel sector.
Gareth Stace, UK Steel’s director general, said: “The speed and ambition of Ursula von der Leyen’s Steel Action Plan shows what’s possible when Governments act decisively. The UK Government should take note. The EU Commission’s plan tackles the same challenges facing UK steel, including high energy prices, trade defences, securing critical raw materials, a stronger CBAM and prioritising domestic steel in procurement.
“A long-term Steel Strategy matters, but certain actions are needed now. UK Steel has handed clear, worked-up solutions that will reverse our decline to Government. It is time to deliver competitive energy prices, tighten our safeguards against a flood of imports and ensure publicly-funded projects use British-made steel.
“The EU has set out a bold and urgent vision for its steel sector. The UK Government must match that ambition and act swiftly to secure the future of our industry before it is too late. We trust it will."