The IAA needs to be reviewed to attract investments for the transition period
The absence of the "Made in Europe" requirement for steel production in the proposal for the Industrial Acceleration Act (IAA) means that it will not attract the investments needed to transition the European steel industry to a low-carbon approach, Eurofer argues.
In March, the European Commission confirmed that its IAA legislative proposal includes a provision that 25% of the volume of steel purchased for government projects starting in 2029 should be low-emission. However, given the upcoming new steel trade regime, the "made in the EU" requirement was not included.
"If Europe wants to decarbonize its steel industry, it must create demand for low-carbon steel produced in Europe. Otherwise, the EU risks financing foreign production, while weakening investment, jobs and industrial potential at home," Eurofer CEO Axel Eggert said in a note sent to Kallanish.
Although government purchases of steel are not including the EU mandate, other industries are doing so, including the automotive industry, a major consumer of steel.
"While European-made steel is required for CO2 emission credit schemes, this does not apply to vehicles purchased through public procurement and government schemes that require low-carbon steel. This can lead to confusion in the market and weaken the demand signal. Therefore, products that are classified as "EU-made" should also include a significant minimum proportion of low-carbon steel produced in Europe," Eurofer notes.
Eurofer also calls for a single, clear definition of European origin based on steel that is smelted and bottled in the EU to ensure that public procurement and support schemes truly prioritize European production.
"The main problem is the lack of reliable and consistent rules on the origin of products in the EU. According to the current proposal, products labeled as "Made in the EU" may include steel produced outside the EU and processed only in Europe. Since more than 75% of steel imports to the EU come from partner countries under the free trade agreement, products from almost 80 countries can qualify for EU support programs, despite the fact that they are not subject to comparable carbon costs, which puts the European steel industry at a distinct disadvantage," notes the association.
The company also strives to increase the minimum share of steel