Industry and Entrepreneurship
Ensuring a future for steel in Europe
Today's Europe was born with steel. After the end of the Second World War, the European Coal and Steel Community (ECSC) became the first nucleus of what is now the European Union. Things have changed since, but the sector remains important for the EU economy as it employs 360 000 people across 23 member states and provides one of the most basic materials from which most of our world is made, from buildings to refrigerators.
If deprived of its steel production, European industry could not function. Carmakers, shipyards, machinery, defence and the construction sector would have to search for their core material abroad, at higher prices.
"From 1951, the European project was built on the basis of coal and steel. But after the expiry of the ECSC Treaty in 2002, the steel sector was somewhat left to its own devices. So it is time to take a new interest in steel. We need steel, not only for the construction and automotive industries, but also if we want to take advantage of our sources of green growth. The steel sector remains a strategic sector for Europe, and we must join forces to overcome its current crisis together."
The European Commission wants and needs to keep sufficient levels of steel production in Europe, despite recent sudden changes in the global industry.
The EU remains the second largest producer in the world, although the EU's share of global steel production fell from 22% to 12% between 2001 and 2011. EU steel output is around 17% below 2007 levels, with up to 25% of our production capacity unused. As a consequence, many factories have been forced to close or are facing closure.
To turn the tide, we must restore the demand for steel in Europe, currently significantly low due to the financial and economic crisis.
Tackling the crisis with a sound investment policy is expected to reactivate the main steel consumers in Europe, which are car and construction sectors. They absorb about 40% of the overall steel output. The Commission has proposed a number of precise measures to relaunch both sectors.
It is also crucial to revise the EU's climate change policy, making it more flexible. Europe leads the green revolution and should continue to do so. But, forcing steel makers to relocate outside the EU to avoid strict environmental rules and taxation, will not improve Europe's stance in the fight against climate change.
The planet is hurt by greenhouse gases, regardless of where they are produced. Since global steel output is increasing, we should promote production in Europe where the environment is better protected rather than in countries which did not even sign the United Nations Kyoto Protocol on climate change. This will help the planet, and will also help fight the plague of high unemployment in Europe.
We should also reduce the energy bill which represents up to 40% of the total costs of a steel plant in Europe, significantly more than in the US, Russia, the Middle East or China.
In June 2013 the European Commission published a steel action plan to tackle all these issues, and is gradually applying the measures it proposed.