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Why is the Commission presenting an Action Plan for the European Steel and Metals industry?
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Steel and metals are the backbone of Europe’s industrial economy, essential for the energy, transport, construction, and defence sectors. To remain globally competitive, the European steel and metals industry must address challenges arising from high energy costs and intensifying international competition. As one of the EU’s largest industrial emitters, the sector must accelerate its decarbonisation efforts while maintaining competitiveness. The European Steel and Metals Action Plan builds on the Clean Industrial Deal, outlining concrete actions to make decarbonisation a driver of growth for European industry and envisages measures to deal with global overcapacities and market distorting measures such as unjustified US tariffs on EU steel and aluminium.
How does this plan help European steel and metal companies stay competitive?
The European Steel and Metals Action Plan is designed to strengthen the sector’s competitiveness and safeguard the industry’s future.
The plan focuses on six pillars: 1) ensuring access to clean and affordable energy, 2) preventing carbon leakage, 3) strengthening European industrial capacities, 4) promoting circularity for metals, 5) defending quality industrial jobs, 6) de-risking projects through lead markets and public support.
What measures are foreseen to support access to cleaner and more affordable energy?
The Commission calls on Member States to make use of all the flexibilities provided by the European energy legislation and State aid rules to lower costs for energy-intensive industries, for example through the design of network tariffs and by lowering electricity taxation down to zero.
For its part, the Commission will provide Guidance on the design of network tariffs and of public support schemes for clean energy, making sure that such support schemes can be combined with long-term Power Purchase Agreements.
The Commission will propose additional measures to facilitate and accelerate access to grid infrastructure for electrification projects in energy intensive industries.
What funding and incentives are available for businesses investing in decarbonisation?
The EU and Member States have already been actively supporting investments in decarbonisation through a combination of public and private funding, financial incentives, and regulatory reforms. From October 2022 to February 2025, the Commission approved close to €9 billion of State aid for steel decarbonisation projects and support schemes; in addition, several steel and metals decarbonisation projects also received support through the EU Innovation Fund and the LIFE programme.
In the future, the EU will expand its support for innovation and commercialisation in these sectors. The Commission will launch flagship initiatives under the Research Fund for Coal and Steel (RFCS) which would mobilise €150 million in 2026 and 2027 and could also contribute to strengthening the European defence research dimension of the sector. In addition, the Commission will propose an overall reform of the Research Fund for Coal and Steel, to simplify and further accelerate investments in steel research, including for defence-related research.
Finally, the Industrial Decarbonisation Bank announced in the Clean Industrial Deal aims to mobilise €100 billion in funding at scale-up stage, leveraging funds from the Innovation Fund, additional revenues resulting from parts of the ETS as well as the revision of InvestEU. In 2025, the Commission will launch a pilot with a € 1 billion auction to support the decarbonisation and electrification in key industrial processes across various sectors.
What measures are foreseen to address the global steel overcapacity?
To protect European industry from global overcapacity and unfair competition, the Commission has proposed to adjust the current steel safeguard as of 1 April 2025. The safeguard shields the industry by imposing tariffs for the quantities above historical trade levels. Due to the upcoming expiry of the steel safeguard measure in June 2026, by the third quarter of 2025, the Commission will make a legislative proposal for a trade measure replacing the steel safeguard and providing a highly effective level of protection against negative trade-related effects caused by global overcapacities to the EU’s steel sector.
What measures are proposed to address unfair trading practices in other metals sectors?
The Commission stands ready to make use of the trade defence instruments and to launch an investigation for safeguards in the aluminium sector immediately after the duly substantiated request is made. The Commission will also conduct the ongoing ferroalloys safeguards investigation expeditiously and will assess the introduction of the rule of “melted and poured” to prevent circumvention of its trade defence measures.
What measures is the Commission proposing to prevent carbon leakage?
Carbon leakage refers to the situation where companies move their production to countries with less strict environmental regulations, typically in terms of carbon emissions. The EU’s Carbon Border Adjustment Mechanism (CBAM) is the EU’s tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. Because of the urgency of the situation, the Commission will frontload some key aspects of its CBAM review. It will notably issue in the second quarter of 2025 a Communication setting out its analysis and options on how to avoid carbon leakage at export. The Commission will also – as part of its general CBAM review – table a first legislative proposal amending the Carbon Border Adjustment Mechanism (CBAM) Regulation by the end of the year to extend the scope of CBAM to certain steel and aluminium-intensive downstream products, to prevent the risk of carbon leakage being pushed further down the value chain. The Commission will also propose other CBAM anti-circumvention measures.
What is the Commission proposing to support workers?
The best support to workers is to ensure that steel and metals plants can still operate within the EU. By giving clarity, protection and predictability to EU steel and metals makers, the European Commission is acting to safeguard quality industrial jobs all over the continent. In complement to this unprecedented effort for the sector, the Commission is committed to working jointly with social partners to ensure a just and fair transition of the sectors.
What role does the Critical Raw Materials Act play in helping the steel and metals sectors?
Aluminium, copper and nickel, as well as many steel alloying elements, are critical raw materials and therefore benefit from the provisions of the Critical Raw Materials Act, which seeks to unlock the EU’s raw materials potential along the entire value chain.
The Critical Raw Materials Act, which came into force in May 2024, will provide targeted funding and regulatory streamlining for key projects involving aluminium, copper, and nickel. The EU will streamline permitting for strategic raw material projects, simplify access to public funding, and launch a platform to stabilise raw material markets and reduce price volatility.
The Commission will announce the first round of selected Strategic Projects in March 2025 in the EU Member States and partner third countries, which will allow them to benefit from streamlined permitting procedures and facilitated access to funding.
Furthermore, the Commission is working to increase the stability of raw materials markets, to prevent excessive price fluctuations that could put European projects at risk. The demand/supply matchmaking aggregation platform for critical raw materials, to be launched this year, could also benefit the base metals sectors, increasing business opportunities and providing additional long-term certainty for transactions.
What is the Transition Pathway for European Metals Sectors and how is it linked to the Steel and Metals Action Plan?
In its updated 2021 industrial strategy, the Commission proposed a series of transition pathways to be developed jointly with EU Member States, industry and other stakeholders. These pathways identify the actions needed to achieve the twin green and digital transition, while giving a better understanding of the challenges, scale, benefits and conditions required.
In the summer of 2023, the Commission launched the ‘co-creation’ process for the transition pathway for the European metals industry. The process involved EU Member States, the ferrous and non-ferrous metals industries, social partners, NGOs and academia. This report identifies a series of actions proposed by different stakeholders to ensure a successful twin transition for the metals sectors and provide additional background and bottom-up analysis as a timely input into the Steel and Metals Action Plan.
For More Information
Action Plan on Steel and Metals
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