European Commission announces EU steel action plan

The European Commission has published its action plan to safeguard the European steel industry. The Commission proposes to support demand for EU-produced steel both at home and abroad, by acting to ensure EU steel producers have access to third country markets through fair trade practices. The European Commission is also committed to cutting costs for the industry, including those arising from EU regulations.
 
Measures suggested in the plan 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 costs will also be looked into.
 
The European Steel Association (EUROFER) has welcomed the action plan, though adding, "There still is a lot of work to be done until our sector will substantially benefit from the proposals". EUROFER also stated 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.
 
EUROFER also reiterated that the studies indicate that the EU steel industry's potential to further reduce CO2 emissions from steelmaking up to 2050 is, due to economic and technical issues, limited to 15 percent per metric ton of steel produced, highlighting that the 80-95 percent reduction target for greenhouse gas emissions by 2050 in the EU is not possible with the available technologies.
 
According to the European Commission, the world steel industry currently finds itself with approximately 542 million mt of excess capacity. Out of this, almost 200 million mt are located in China. Presently, overcapacity is estimated at approximately 80 million mt in the EU, compared to EU total production capacity of 217 million mt. If the steelmaking capacity remains constant after 2014, it could take five to seven years for demand to match capacity, if demand increases at current rates of growth.