The European Commission announced the launch of its Action Plan on Steel and Metals, outlining a broad range of initiatives aimed at protecting and strengthening the industry’s competitiveness, and supporting its decarbonization.

According to the Commission, the new Action Plan comes as the European steel and metals industry faces a series of challenges, including high energy costs, and unfair global competition, as well as a need for investments to reduce greenhouse gas emissions, with the sector being one of the EU’s largest industrial emitters. The plan focuses on six key pillars, including ensuring access to clean and affordable energy, preventing carbon leakage, strengthening European industrial capacities, promoting circularity for metals, defending quality industrial jobs, and de-risking projects through lead markets and public support.

The release marks the second Action Plan, after one focused on the automotive sector, to be launched by the Commission under its new “Competitiveness Compass” roadmap to boost Europe’s productivity and global competitiveness. The roadmap included plans to introduce in 2025 “tailor-made action plans” for key energy-intensive industries, as well as plans for initiatives including a proposed “Industrial Decarbonisation Accelerator Act” targeting streamlined permitting for renewable energy for emissions-intensive sectors, and a review of the Carbon Border Adjustment Mechanism (CBAM).

Within the pillars focused on sector decarbonization, the Commission unveiled a series of initiatives and plans aimed at boosting the industry’s access to and use of clean energy, promoting investment in clean technologies, and de-risking emissions reduction investments for companies.

Key actions to increase the use of clean energy include promoting the use of Power Purchase Agreements (PPAs), encouraging member states to reduce network tariffs to alleviate electricity price volatility, promoting faster grid access and supporting the increased use of renewable and low-carbon hydrogen.

Sustainability-focused funding and incentives highlighted by the plan include plans to mobilize €100 billion in funding at scale-up stage through the “Industrial Decarbonisation Bank” announced in February in the Clean Industrial Deal, starting with a €1 billion pilot auction in 2025 focusing on decarbonizing and electrifying key industrial processes.

The Action Plan also aims to implement measures to address “carbon leakage” in the sector, a situation in which companies move production of emissions intensive goods to countries with less stringent environmental and climate policies, through revisions to the Carbon Border Adjustment Mechanism (CBAM), the EU’s carbon tax on imported goods. Plans include introducing a legislative proposal later this year to extend the scope of CBAM to certain steel and aluminium-based downstream products and to include additional anti-circumvention measures.

Additionally, the Action Plan includes a series of actions aimed at boosting circularity in the metals industry, including plans to set targets for recycled steel and aluminium in key sectors, assessing whether products such as construction materials and electronics should have recycling or recycled content requirements, and considering trade measures on metal scrap to ensure sufficient availability of scrap.

European Commission President Ursula von der Leyen said:

“The steel industry has always been a core engine for European prosperity. Next-generation, clean steel should therefore continue to be manufactured in Europe. That means we have to help our steelmakers who are facing strong headwinds on the global market. To make sure they remain competitive, we must reduce energy costs and help them introduce innovative, low-carbon technologies to the market. With today’s Action Plan we are offering concrete solutions for a thriving European steel industry.”