SteelOrbis talked to Antonio Gozzi, president of Federacciai, the Italian steel producers association, about the situation in the EU steel market and decarbonization efforts. According to Gozzi, the key is to reduce carbon emissions without compromising the competitiveness of European industry.
How would you describe the current demand trends in the EU steel market across major sectors (construction, automotive, machinery, etc.)?
Europe imported 28 million mt of steel in 2024, but the situation will change profoundly from next year. A cap on imports is expected - free trade will be blocked at 18 million mt and beyond this threshold a 50 percent duty will be introduced. On top of this, two fundamental measures are being implemented - Buy European, which obliges public tenders to buy at least 60 percent of steel produced by European companies, and CBAM, which will impose a cost equivalent to the price of CO2 paid in Europe on products from countries not adhering to the Kyoto Protocol. Together, these initiatives will mark a structural change in the European steel market, reducing import pressure and supporting domestic demand for EU producers.
How are high energy prices affecting output, investment and competitiveness?
High energy prices strongly penalize the competitiveness of the European steel industry, with Italy recording the highest industrial costs in the world. Businesses can survive thanks to their extraordinary efficiency, which somehow compensates for the crazy energy costs. The absence of a common energy policy and the ETS system further exacerbate costs. We need interventions to reduce the price of electricity and measures such as the Energy Release, and we also need the energy transition not to be ideological - biofuels, synthetic fuels, carbon capture, nuclear power must also be used to achieve a balanced decarbonization which is not devastating for industrial assets.
Do you envisage further consolidation or restructuring processes in the European steel industry?
I do not believe that the European steel industry should prepare for a season of restructuring or downsizing, but rather for a phase of profound renewal. Making our companies survive and prosper means continuing on the trajectory of innovation and investment that has always distinguished us. We must leverage our competitive advantages. We are among the most decarbonized manufacturers in the world and we must keep the passion for manufacturing alive, enhancing the work and the people who are part of it. This is the only way we can guarantee a future and pride for European steel.
What are the effects of geopolitical developments on trade routes?
The direct effects of Trump's tariffs, now at 50 percent, have practically wiped out our exports to the US, but our greatest concern is about indirect effects, the so-called trade diversion. Countries that have been excluded from the American market, especially China with its huge production overcapacity, are pouring their flows into Europe, which remains the most open market in the world.
We are living in a new historical phase. Globalization as we know it no longer exists, and free trade, if not accompanied by fair rules, risks becoming wild trade. That is why we are calling for a redefinition of international trade rules and effective defence measures, and we support tools such as Buy European, which can help protect the European industry in the face of increasingly distorted and aggressive competition.
What are your expectations for steel demand and prices in the short to medium term?
I do not expect a significant increase in demand in the short and medium term, but rather a phase of adjustment linked to economic weakness and geopolitical uncertainties. However, the steel industry is undergoing a structural transformation. The share of steel produced by electric arc furnaces (EAFs) will grow worldwide and is expected to exceed 45 percent by 2030. As for prices, the main variable will be the cost of CO2: with the CBAM coming into force, and the progressive reduction of free allowances, the price of emissions could reach up to 200 dollars per metric ton, strongly affecting production costs and therefore steel prices.
Are you optimistic or cautious about the EU steel sector’s medium-term competitiveness?
I look at the future of the European steel industry with great pride but also with realism. Italy can be proud of its model - we are among the most decarbonized steel producers in the world and an example of circular economy thanks to the main use of electric furnaces and scrap. However, we are going through a particularly difficult phase. We are living in an era of uncertainty, marked by high energy costs, complex regulatory transitions and aggressive global competition. For this reason, while I remain confident in the strength and innovation skills of our companies, I am cautious about European competitiveness in the medium term. We need decisive political choices and a real European industrial and energy policy that accompanies the green transition without sacrificing production and employment.
How do you assess the EU's latest announcement on safeguard policies?
We have warmly welcomed the European Union's announcement on the revision of the safeguard measures for steel. It is a necessary and long-awaited step, because without adequate defense policies, the European industry risks being overwhelmed by unfair competition and production overcapacity from non-EU countries. I would like to thank the [executive] vice-president [for Prosperity and Industrial Strategy of the European Commission] Séjourné and [European] commissioner Šefčovič for their sensitivity to the European industrial crisis and for their willingness to change direction quickly. We hope that the new measures will be adopted as soon as possible, together with other instruments such as Buy European, to ensure a fair market and to protect the competitiveness of the European steel industry.
Are these trade measures effective in ensuring a level playing field or do they end up distorting competition?
We are strong supporters of free trade, but not of wild trade. Defensive measures should not be seen as distortion tools, but as guarantees to ensure a level playing field in an increasingly unbalanced global environment. Europe today is the most open market in the world, and it risks paying a very high price if it does not acquire adequate tools to protect its industry.
What do you think are the main challenges of CBAM and what effects do you foresee on trade flows?
CBAM is an important tool, created with the aim of protecting the European industry from forms of unfair competition linked to the different environmental rules between countries. However, its structure still presents serious contradictions and application difficulties that risk compromising its expected positive effects. With the official CBAM implementation on January 1, 2026, and free CO2 allowances being phased out, the cost of emissions could reach up to $200 per metric ton. In the absence of corrective measures, this will make production for European blast furnaces unsustainable, shifting steel flows to less regulated areas. This is why we are asking Europe to accompany the application of CBAM with a real industrial policy, which protects the competitiveness of our companies and guarantees a sustainable and non-destructive green transition for the European steel industry.
Do you think current EU funding mechanisms are sufficient to support the green transition in steel?
The current funding mechanisms and policies of the European Union are not enough. The Green Deal has had an overly ideological and not very pragmatic approach, which has penalized the competitiveness of European industry without creating real technological advantages. We have seen a 30 percent loss of production in hard-to-abate sectors and over a million job losses in the past five years. While Europe imposes increasingly strict rules on itself, we are simply exporting jobs and importing CO2 from countries with lower environmental standards. We need less ideology and more pragmatism. We need to review the ETS system, maintain free allowances for energy-intensive consumers and concretely promote all useful technologies for decarbonization, such as carbon capture, biofuels, nuclear power and synthetic fuels, with a view to true technological neutrality. Only in this way will we be able to decarbonize without destroying our industrial base.
How do you see the balance between environmental targets and global competitiveness?
The balance between environmental targets and global competitiveness is only possible if Europe abandons ideology and adopts a pragmatic approach. We need to understand that there is no single way to decarbonise. Biofuels, nuclear, carbon capture and synthetic fuels are all useful technologies and must be able to coexist. It doesn't matter if the cat is black or white, the important thing is that it catches the mouse. What I mean is that what really matters is reducing CO2 emissions without compromising the competitiveness of European industry.
How was 2025 and what are your expectations for 2026?
2025 was a fairly complex year for the steel industry, marked by an uncertain macroeconomic environment, weak demand in some key sectors, and strong pressure on energy and regulatory costs. It was a year of transition, in which companies worked primarily to defend volumes, employment, and competitiveness, postponing more structural investment decisions in many cases. 2026 could be a turning point, provided that the right conditions are in place. We expect a gradual recovery in demand, linked to the resumption of industrial and infrastructure investment, and a greater impact of European policies to protect the sector, starting with CBAM, safeguard measures, and the containment of unfair competition. The challenge remains to reconcile decarbonization and competitiveness: if the transition process is accompanied by concrete industrial policies, sustainable energy costs, and rules applied fairly at the European level, 2026 could mark the beginning of a more stable and promising phase for the Italian steel sector.