decarbonisation

EU Launches Several Initiatives to Optimise Steel Industry

Clean Industry Agreement issued to introduce carbon intensity labelling for steel and cement

The European Commission released the Clean Industry Agreement on 26 February, focusing on two main areas: energy-intensive industries and clean technologies, with the aim of accelerating the decarbonisation process and ensuring that manufacturing remains rooted in Europe in the future.

The European Commission says European industry is in dire need of support in the face of high energy costs, growing global competition. The Clean Industry Agreement establishes “decarbonisation” as a powerful driver of industrial growth in Europe, ensuring that Europe is firmly on track to reach its 2050 goal of a carbon-neutral economy.

To this end, the EC has developed a number of initiatives, including reducing energy costs, increasing demand for cleaner products, financing the cleaner transition, recycling and access to materials, acting globally and ensuring access to skilled labour. In the short term, the Clean Industry Agreement will raise more than €100 billion to support clean manufacturing made in the EU.

In addition to existing and new trade agreements, the EC will soon launch the first Clean Trade and Investment Partnership. At the same time, it will protect its industries from overcapacity through a range of trade defence and other instruments.

The Circular Economy Act will be adopted in 2026 to accelerate the circular transformation and ensure that scarce materials are used and reused efficiently to reduce global dependence. The goal is to have 24 per cent of materials recycled by 2030.

Under the Industrial Decarbonisation Accelerator Act under the Clean Industry Agreement, the European Commission will introduce voluntary carbon intensity labelling for industrial products, starting with steel and then cement in 2025. The initiative aims to accelerate access to clean energy for energy-intensive industries. The bill is expected to be finalised in the fourth quarter of 2025. The European Commission said it will simplify and harmonise carbon accounting methods, using data from the Emissions Trading System (ETS) and based on the CBAM methodology. Such labelling will allow industrial producers to differentiate the carbon intensity of their production activities and benefit from targeted incentives.Carbon intensity labels for steel will be based on existing reporting by the industry, while carbon intensity labels for cement will be created under the Construction Products Regulation, with standardisation requirements to be introduced soon.

Major reforms to CBAM announced

The European Commission proposed on 26 February to adjust the timetable for the sale of carbon pricing certificates under its Carbon Border Adjustment Mechanism (CBAM) and to make the tax more simplified and efficient. Analysts noted that the competitiveness of EU industry could be improved by exempting small importers and reducing the administrative burden on many companies. Under the new proposal, importers would be able to buy CBAM certificates from February 2027, rather than from 1 January 2026, to cover emissions included in 2026 imports.The method of calculating the price of certificates will not be affected, and certificates purchased in a given week in 2027 to cover 2026 emissions will reflect the weekly price applied by the EU Emissions Trading System (ETS), the document said.

Another significant change proposed by the European Commission is the adjustment of the exemption threshold.The document proposes to raise the threshold to less than 50 tonnes to ensure that more than 99 per cent of emissions remain within range.This change would exempt some 182,000 importers (90 per cent of total importers) from CBAM obligations, while still covering more than 99 per cent of emissions.

The main reason for raising the exemption threshold is to reduce the impact of CBAM on small importers, while simplifying the carbon tax and maintaining environmental benefits.

Strategic dialogue and special actions on steel to be launched

Recently, the European Commission said in a statement that it will establish a strategic dialogue on steel and develop a dedicated action plan for steel and metals, which will be launched in spring 2025. The objective of the Strategic Dialogue is to chart a clear path for the future of the European steel industry, highlighting the importance the Commission attaches to this strategic sector and recognising its central role in innovation, development, employment and the strategic autonomy of the EU region. The European steel industry is currently facing unprecedented challenges such as soaring energy costs, access to raw materials, unfair global competition and pressure from new US tariffs, which require targeted action, and the Steel Strategic Dialogue may set out a strong and implementable plan for the future of the sector, the European Commission said.

The strategic dialogue was first announced in early February 2025 by Ursula von der Leyen, President of the European Commission.She chaired a high-level meeting on 4 March, which was attended by various key representatives of the steel chain, such as steelmakers, raw material suppliers, buyers, as well as social partners and civil society. Von der Leyen said that the steel industry is a key sector in the European Single Market and is also crucial in the fight against climate change. In order to address the particular challenges of a cleaner industrial transformation, the strategic dialogue will help to develop a concrete action plan that will ensure the competitiveness and sustainability of the European steel industry in the long term.

The European Commission has officially announced that Stephane Sejourne, Executive Vice-President for Prosperity and Industrial Strategy, will be responsible for developing the action plan. Sejourne said that there has always been a European plan for its industry, and that while increasing production, it must be clean and must produce products that are indigenous to Europe. He added that this starts with Europe’s most strategic industries, and the steel industry is one of them. He said that it is important to defend the European steel industry from unfair foreign competition and to promote the production of clean steel indigenous to Europe. This would not only benefit the steel industry, but also steel-related industries. He also pointed out that the action plan is a key component of the EU’s industrial competitiveness and overall economic security.

The European Commission said the dialogue will build on the recently published EU Competitiveness Guidelines and the forthcoming EU Clean Industry Agreement, and will focus on how to improve competitiveness and recycling, promote the cleaner transition, decarbonisation and electrification, and ensure fair trade relations and an international level playing field. The European Commission also said that the Council and the European Parliament will be informed and consulted throughout the dialogue, as well as more broadly with other stakeholders across the industry. The European steel industry contributes about 80 billion euros ($84 billion) to the EU’s gross domestic product, according to the European Commission.

(Article translated from: World Metal Guide)