Unesid Calls for EU to Safeguard the Steel Industry in Global Competition
On March 3, 2025, Unesid, Spain’s steel association, raised serious concerns about the challenges facing the European steel industry. The association strongly urged the European Union to take coordinated action in the face of mounting global competition, high energy costs, and trade imbalances. Unesid’s plea comes as the EU’s steel industry continues to face pressures from foreign competition, particularly in the form of dumped imports from countries such as China, India, and others with lower labor and production costs.
The Ministerial Conference on Steel in Paris, which was organized by French Industry Minister Marc Ferraci and Italian Minister Adolfo Urso, became a platform for discussing the future of Europe’s steel sector. Unesid’s President, Bernardo Velázquez, joined several EU ministers and representatives from Poland, Luxembourg, Slovakia, Greece, Austria, Hungary, Romania, Belgium, and the European Commission in a bid to formulate solutions to bolster the EU’s steel industry.
The focus of the meeting was clear: safeguarding the sustainability and competitiveness of Europe’s steel sector in an era of global challenges. The call for EU solidarity in addressing these challenges was amplified by Velázquez, who emphasized that to ensure the viability of Europe’s steel sector, it was crucial for European governments to collaborate on a commercial and regulatory framework that allowed the industry to compete on equal terms globally.
The Key Challenges Facing Europe’s Steel Industry
1. Rising Energy Costs:
The energy-intensive nature of steel production has long been a significant challenge for European steelmakers, who face rising energy prices. As energy costs rise, steel producers within the EU struggle to remain cost-competitive compared to those in regions where energy costs are significantly lower, such as China, India, and Russia. Many European steel plants rely on natural gas and electricity, which have seen prices fluctuate due to geopolitical factors, including the ongoing energy crisis resulting from conflicts and supply disruptions.
Unesid stressed that ensuring competitive energy prices is vital for maintaining the European steel industry’s edge in global markets. Without stable, affordable energy, European steelmakers may find it increasingly difficult to maintain their market share, particularly when competing against producers from countries that benefit from lower energy costs.
2. Trade Barriers and Dumping:
In addition to rising energy prices, European steelmakers also face significant trade barriers. Over the past few years, countries like China and India have been accused of dumping cheap steel into the European market, often subsidized by their governments. The low prices of these products, due to subsidies or undervalued currencies, can severely undermine the profitability of European steel producers.
To counter this, Unesid has called for the accelerated enforcement of anti-dumping measures, including allocating more resources to the European Commission for investigations. The association also advocates for stronger safeguards to protect European steelmakers from unfair competition and price manipulation by foreign producers. The implementation of trade control instruments, like tariffs and quotas, would help ensure that European producers can compete on level ground.
3. The Carbon Border Adjustment Mechanism):
Unesid has shown support for the Carbon Border Adjustment Mechanism, a policy designed by the EU to address carbon leakage. CBAM imposes a carbon tax on certain imported products, including steel, cement, and aluminum, ensuring that non-EU producers adhere to the same environmental standards as EU-based manufacturers. However, while Unesid supports the goals of the CBAM, it also raised concerns about the additional costs that European steel exporters could incur due to this tax.
Unesid emphasized the need for a compensation mechanism that could help offset the additional costs for European steel exporters who face the burden of both CBAM and the Emissions Trading System. Without such a measure, European steelmakers risk facing a competitive disadvantage against non-EU producers who do not bear similar costs, potentially rendering European steel products more expensive in global markets.
Unesid also pointed out that the strict monitoring of CBAM is crucial to prevent circumvention. Imported steel must meet EU environmental standards to prevent unfair competition, ensuring that foreign steel does not flood the market at artificially low prices without adhering to the same carbon footprint regulations.
Unesid’s Recommendations for a Unified EU Approach
1. Coordinated EU Response:
Unesid stressed the urgency of a unified European approach to protect the steel industry from global challenges. Bernardo Velázquez called for greater collaboration among EU member states to create a commercial and regulatory framework that allows European steelmakers to compete with their global counterparts on equal footing. This includes addressing the high energy costs, strengthening trade defense measures, and ensuring a level playing field for both domestic producers and importers.
2. Stronger Trade Controls:
Unesid recommended that the EU allocate more resources to anti-dumping investigations and the enforcement of trade measures to protect the European steel sector from the influx of cheap imports. This would involve better traceability of imported steel, ensuring that the origin of steel products is accurately identified to prevent the circumvention of trade measures. The melt and pour system, which determines the origin of steel products based on the production process, was proposed as a way to guarantee reliable traceability.
3. New Financing Options:
The association also called for the introduction of new financing options for European steelmakers. Modernization, innovation, and sustainability initiatives are essential for ensuring that the EU steel industry remains competitive in an ever-changing global market. Unesid highlighted that access to affordable financing could help European steelmakers invest in new technologies and reduce their environmental impact while maintaining production capacity.
The Path Forward for Europe’s Steel Industry
As the global steel market continues to evolve, European steelmakers face an increasing array of challenges that threaten their competitiveness and sustainability. However, Unesid’s call for a coordinated EU response highlights a crucial opportunity to ensure that Europe’s steel sector can adapt and thrive in a changing global landscape. By focusing on competitive energy prices, stronger trade controls, and new financing options, the EU can help its steel industry remain resilient and capable of facing the pressures of the global market.
With the future of the European steel sector hanging in the balance, it is clear that unified action from EU governments, industry stakeholders, and regulatory bodies will be crucial to preserving the industry’s viability. By aligning trade, energy, and financing policies, Europe’s steel sector can continue to thrive and maintain its place as a global leader in steel production and innovation.
Key Takeaways:
• Unesid urges the EU to adopt a unified approach to ensure the sustainability and competitiveness of Europe’s steel sector.
• The association called for competitive energy prices, stronger trade controls, and new financing options to support the steel industry.
• Unesid supports the Carbon Border Adjustment Mechanism but calls for a compensation mechanism to offset additional costs for European exporters.
• The association advocates for better traceability of imported steel and stronger anti-dumping measures to combat unfair trade practices.
• Coordinated EU action is seen as essential to creating a commercial and regulatory framework that allows European steelmakers to compete globally on equal terms.
