Europe steels itself

An extraordinary Competitiveness Council will be held today (9 November) in reaction to a slew of announcements from industry of job losses and redundancies. The UK is particularly affected, where around 5,000 jobs have been lost in the past month alone. There is a real and present threat to the 330,000 workers in the steel sector, a headcount that is down 85,000 since 2008.

The EU steel sector currently suffers from major global overcapacity in production. Other producers suffer equally from the global economic slowdown and ensuing overcapacity, which has pushed down prices and encouraged trade-distorting behaviour from competing regions. According to the EU Chinese excess steel capacity in 2014 was approximately 340 million tonnes, which is more than double the EU’s annual crude steel production for the same year (169 million tonnes).

The European steel industry has a turnover of around €180 billion with direct employment of about 360 000, producing around 170 million tonnes of steel per year in more than 500 steel production sites in 23 member states.

The EU accounts nowadays for only around 10% of global output, down from 22% in in 2001 and 15.7% in 2007. In contrast, China’s share of world steel production rose from 15% in 1999 to around 50% today.

Speaking on the eve of the Council meeting, industriAll  Deputy Secretary General Bart Samyn said: “Ministers need to understand that job losses are happening now. These layoffs are the direct consequence of the regulatory burden at EU and member state levels, and in particular due to the dumping of Chinese steel on the EU market.”

Where there is unfair competition the Commission says it can deal with this through its Trade Defence Instruments (TDI). At the moment there are around 37 definitive anti-dumping measures currently in force to protect the EU steel industry from unfair commercial behaviours.

EUROFER Director General Axel Eggert said: “The EU needs to adapt trade, climate and energy policies, in particular the review of the EU Emission Trading Scheme, to keep our sector competitive. Best performers in carbon leakage sectors like steel must not be penalised by additional direct or indirect carbon costs against extra-EU competitors. Our goal is for policy makers to do whatever it takes to keep this innovative, strategic industry in Europe.”

In the reform of the Emission Trading Scheme (ETS), the Commission aims to secure access to free allowances for energy intensive industries including the steel sector, within the limits imposed by the general climate and energy framework. With a view to national supporting measures within the framework of national energy schemes, the Commission acknowledges that state aid and competition policy is an important element to protect the Single Market. The Commission says that guidelines on renewable energy support schemes, as well as the possibility for member states offsetting indirect ETS costs are helping ease the costs for industry.

Eggert and Samyn said: “Once these jobs have disappeared, they are gone forever. We hope that the meeting can help to build a consensus around practical, swiftly implementable policies, including full and proper impact assessment, designed to support innovation, lower energy costs, restrain the regulatory burden and – vitally – to ensure that European steel producers face a level playing field in international trade.”

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