Poland's steel industry, once a cornerstone of its industrial base, is now grappling with an array of challenges that threaten its viability and future competitiveness. In response to these concerns, the Ministry of Industry of Poland has established a working group tasked with developing a national strategy for the sector. This strategy will aim to tackle pressing issues, including high energy costs, increased competition from non-European producers, and the declining capacity utilization in Polish steel mills.
The working group, led by Minister Marzena Czarnecka, includes experts from various industry organizations, such as the Polish Steel Industry and Chamber of Commerce and the Polish electricity transmission system operator PSE. The group’s work, which began in early 2025, is expected to provide a comprehensive national strategy for the steel industry, ultimately helping Poland address the crisis in its steel sector and secure its place in the future global market.
Current Challenges Facing Poland’s Steel Industry
Poland's steel industry has been facing increasing pressure in recent years, compounded by both domestic and international factors. One of the most significant challenges is rising energy prices. The Polish steel sector, which is highly energy-intensive, has struggled to cope with soaring energy costs, which are exacerbated by EU climate policies. This is a problem not only for the steel industry but also for all energy-intensive sectors in the country, as highlighted by Andrzej Karol, the chairman of the National Metallurgy Section of NSZZ Solidarność.
At the same time, the Polish steel sector faces overproduction in Asian markets, particularly China, where cheap steel is flooding European markets. This has led to price compression and diminished demand for locally produced steel. The situation worsened at the end of 2023 when steel prices dropped sharply, and production levels hit alarming lows. In fact, HIPH noted a dramatic decline in finished steel products, with overall capacity utilization in the industry dropping to 60% in 2023, far below the optimal level of 85%.
Moreover, imports have been steadily increasing, putting additional strain on the domestic market. Imports of steel into Poland grew by 18% over the past decade, while production of finished steel fell by 14% during the same period. This has contributed to a market share of imported steel that is unsustainable, up to 73% in 2024. The flat products segment is particularly hard-hit, with imports accounting for 88% of domestic consumption.
The Role of the Working Group
To combat these challenges, the newly formed working group will focus on several key objectives. Minister Marzena Czarnecka emphasized that the group’s work will include:
• Identifying key challenges facing the steel industry at both national and European levels.
• Developing proposals to enhance the functionality and sustainability of the steel sector.
• Recommending changes to regulations and policies to support the steel industry.
• Providing input on a national strategy for the steel sector, which will be presented to the Ministry for approval.
The group’s task is a complex one, requiring a deep dive into issues ranging from energy pricing and EU regulations to the challenges of global competition and the transformation of the sector in response to decarbonization goals.
Urgent Need for Strategic Action
The situation in the Polish steel sector has reached a critical point, with the industry experiencing a structural decline. Miroslav Motyka, CEO of HIPH, highlighted that the steel sector needs urgent resuscitation measures to reverse the downward trend. Without strategic intervention, the country risks losing its competitive edge in the global steel market. As imports continue to dominate, especially in flat products, the Polish steel industry faces significant risks in terms of employment, production capacity, and industrial sustainability.
Moreover, the Polish steel industry also faces long-term challenges associated with EU carbon reduction policies. The free allocation of CO₂ emission allowances under the EU Emissions Trading System will gradually phase out starting in 2026, and carbon border adjustment measures will come into effect, adding further financial pressure on Polish producers. Compounding this is the fact that energy prices in Poland are expected to remain higher than in the rest of Europe, making it even more difficult for local steel manufacturers to compete on price.
Decarbonization and the Future of Polish Steel
One of the most pressing issues for the Polish steel industry is its future path toward decarbonization. As EU regulations demand stricter emissions reductions, Polish steelmakers must adapt to avoid falling behind on global sustainability standards. The working group is tasked with identifying the most effective strategy for green steel production and ensuring that Poland does not lose out on future investments in clean technologies.
Poland’s steel sector needs clear policy direction on how to meet decarbonization goals, particularly in terms of transitioning to electric arc furnaces (EAF) or exploring hydrogen-based steelmaking technologies. Delays in making a strategic decision on decarbonization could further widen the trade gap and lead to an uncontrolled transformation of the sector, as warned by the Instrat report.
