EUROFER welcomes the EU recovery plan

The European Commission will tomorrow, following the request by the European Council, present its EU Recovery Plan to support a climate-neutral, digitalised, and resilient EU economy, helping to rebuild after the COVID-19 pandemic.

The European Steel Association (EUROFER) welcomes the Recovery Plan proposal and has proposed a Green Deal on Steel and matching support measures for the steel industry and its value chains such as automotive, construction and mechanical engineering. This reflects the focus on the EU Green Deal in the EU Recovery Plan itself. Alongside, EUROFER believes the ongoing review of the EU steel safeguards should fully reflect how the pandemic has collapsed the European steel market in order to offer immediate support to the sector.

“We welcome the EU’s efforts to mitigate the impact of the COVID-19 pandemic on EU society, the economy and on European business”, said Axel Eggert, Director General of EUROFER. “We further welcome the focus on the green transition and digital transformation as essential parts of the Recovery Plan”.

The European steel industry has made comprehensive proposals for a Green Deal on Steel, keeping the EU on track to meet its climate and circular economy objectives while securing the global competitiveness of this strategic sector.

“The European steel industry could be the spearhead of a decarbonised EU industry, providing green and perfectly circular steel to the EU’s and global manufacturing value chains”, said Mr Eggert. “This will require significant investment in new technologies from 2021 to 2030 and beyond. The sector will also have higher capital and operational costs as a result of using green energy and matching input materials.”

“These extra costs will need to be balanced by a well-coordinated combination of financing support schemes and regulatory pull-and-push measures”, added Mr Eggert. “With the right approach – and provided we can recover from the current crisis – our industry may be empowered to reduce its direct and indirect CO2 emissions by up to 30% by 2030 on top of around 25% emission reductions already achieved between 1990 and 2018”.

“We have the ambition, under the right conditions, to reduce emissions by at least 80% to 95% by 2050, strengthening existing production and value chains, building, and supporting new industrial eco-systems based on hydrogen, carbon feedstock and circularity”, said Mr Eggert.

As designed, the positive effects of the Recovery Plan will only materialise in the medium term, from one to five years or more from now. However, the economic challenge is very real today, with severe and immediate downturns in the main steel value chains, such as the automotive, construction and mechanical engineering sectors. The idling of EU steelmaking facilities and the collapse of steel prices on the EU market under pressure from third-country stockpiles of steel stemming from overcapacity in other regions has put the EU steel industry is in an unprecedently precarious position.

“Accordingly, we reiterate the need to immediately implement emergency measures to pull back our industry from the brink and stabilise our downstream value chains. Only by ensuring European industry is secured today can it contribute to the green transformation tomorrow”. concluded Mr Eggert. “One immediate step EU policymakers can take is to ensure the ongoing review of the steel safeguards fully reflects the unparalleled implosion of the European steel market. The tariff free import quota needs to be reduced significantly. This would help in the immediate term, whilst also providing a means of supporting the industry as we move into the recovery phase”.

Source: Eurofer                                      Photo: Fotolia