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The European Commission announced an array of recommendations on Tuesday to revive Europe’s steel industry, hurt by tumbling demand and plant closures.
The “EU steel action plan” is the first comprehensive attempt by the Commission to stem a decline in the steel sector since the Davignon Plan sought to tackle an industry slump in the mid-1970s.
The plan, presented by Industry Commissioner Antonio Tajani, aims to cut red tape, boost apprenticeship schemes and innovation, create a level international playing field and study ways to lessen the burden of energy costs, which account for about40 per cent of steelmakers’ operating expenses.
It says existing EU funds should be used to ease the social cost of restructuring, which has caused the loss of 40,000 jobs in recent years, including the planned closure of most facilities at ArcelorMittal in Liege, Belgium.
“The action plan is a good starting point, but there still is a lot of work to be done until our sector will substantially benefit from the proposals,” said Gordon Moffat, director general of European steelmakers association Eurofer.
Critics said the plan lacked concrete measures and that much more decisive action would be required to save a sector afflicted by overcapacity, weak demand and tight financing.
“On the key issue of overcapacity, the report has little to offer,” Wood Mackenzie steel consultant Patrick Cleary said.
Germany’s steel association said the plan was vague on Europe’s climate and energy policy.
Austrian steelmaker Voestalpine, while describing the plan as an important milestone, said European steel firms faced higher energy prices and rising costs for cutting greenhouse gases, with no obvious technological breakthrough.
Steelmakers say carbon emission costs could drive steel production abroad. European steel demand is 27 per cent below peak 2007 levels and forecast to fall even further this year. The number of jobs in the industry dropped 10 per cent between 2007 and 2011. To boost demand, the plan points to existing EU initiatives – Cars 2020 and Sustainable Construction – to help the automotive and building sectors, which make up some 40 per cent of steel demand.
The Commission invited the EU member states to consider reducing or removing tariffs on energy-intensive industries to make them more competitive internationally.
The Commission will also start monitoring imports and exports of steel scrap, a measure sought by Italian steelmakers, many of which operate electric arc furnaces, which use scrap as their main raw material.
The Commission is proposing using existing EU funds to help workers who lose their jobs as a result of plant closures, a measure most steelmakers have called for.
The plan does not propose state intervention to keep local steel plants alive, a step sought by unions.
The majority of European steelmakers oppose giving subsidies to help troubled companies survive, Eurofer president and Voestalpine Chief Executive Wolfgang Eder said in a recent interview.