Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions. Action plan for a competitive and sustainable steel industry in Europe

A strong and competitive steel sector is important for Europe’s industrial base. The EU is the second largest producer of steel in the world, with an output of over 177 million tonnes of steel a year, accounting for 11% of global output. Steel also forms part of a number of industrial value chains and is closely linked to many downstream industrial sectors such as automotive, construction, electronics, mechanical and electrical engineering. It has a significant cross-border dimension: 500 production sites are split between 23 Member States, making it a truly European industry.

Today, the European steel sector finds itself in a very difficult situation. The ongoing economic crisis has led to a marked downturn in manufacturing activity and associated steel demand, which remains 27% below pre-crisis levels. As a result, several production sites have closed or reduced output with corresponding job losses, with up to 40,000 jobs lost in recent years. Consequently the pressure to restructure and reduce production capacity will remain one of the main challenges for this industry in the foreseeable future.

Significantly, overcapacity is not only a European problem. Steelmaking capacity is expected to continue to increase in the next two years with the OECD estimating that globally it will increase by 118 million tonnes to a level of 2,171 million tonnes by 2014. The European steel industry finds itself with the simultaneous effects of low demand and overcapacity in a globalised steel market whilst at the same time being confronted with high energy prices and needing to invest to adjust to the green economy and produce innovative products.

The Commission considers it essential that Europe remains an important steel producing region for economic, social and environmental reasons as well as for security of supply. Following the adoption of the Commission’s 2012 Industrial Policy Communication, seeking to reverse the declining role of industry in Europe from its current level of 15.2% of GDP to as much as 20% by 2020, the March 2013 European Council concluded that it will follow-up the Commission’s work on specific industrial sectors.

This Communication represents the Commission’s response to the crisis in the steel sector and sets out targeted actions to ensure that the operating environment is conducive to a competitive and sustainable steel industry, so that it is able to solve the structural problems it faces, compete globally and develop the next-generation of steel products vital for other key European industries.

EUR-Lex: COM(2013)407: Follow the progress of this communication through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:407:FIN

ESO: Background information: Commission presents an action plan for the steel sector http://www.europeansources.info/record/press-release-commission-presents-an-action-plan-for-the-steel-sector/

---