Decarbonization remains a top priority in the transformation of Europe’s steel industry. However, the pace of the transition depends on the availability of competitively priced clean energy and raw materials, as well as regulations that support investment. This was the main takeaway from the first day of the European Steel Forum, organized by the Association for Iron & Steel Technology (AIST) together with Danieli. The forum took place in Udine on October 27–28.
Participants were welcomed by Giacomo Mareschi Danieli, CEO of Danieli & C., and Rolando Paolone, CEO and CTO of Danieli Group. They were joined by José Noldin, chair of AIST’s European Chapter and CEO of GravitHy. Presentations and discussions addressed the main challenges of the transition, with participants linking the adoption of new production technologies to the conditions needed to keep European industry competitive.
The steel market enters a period of restructuring
AIST Executive Director Ron Ashburn spoke about the restructuring of the steel market and identified three factors that will reshape its dynamics. The first is the transformation of globalization: alongside efficiency, supply reliability is becoming increasingly important, while domestic production and resilient supply chains are viewed as strategic advantages. The second is excess capacity, which exacerbates trade imbalances and prompts countries to make greater use of tariffs, trade defense measures and industrial policy. The third is the opportunity offered by decarbonization, artificial intelligence and electrification: energy infrastructure and advanced manufacturing could become sources of new demand.
Carbon neutrality targets: investment continues, transition timelines lengthen
The first panel discussion, “Transforming the European Steel Industry to Achieve Carbon Neutrality,” was moderated by Jürgen Kappel, managing director of Cappel Stahl Consulting. Participants included Andrea Bianchi, CTO of Arvedi Group; Thomas Bürgler, CEO of K1-MET; Martin Pei, senior advisor at SSAB; Sebastian Börner, technical project lead for Power4Steel at Stahl-Holding-Saar; and Sjoeke Helmers, head of electric arc furnaces at Salzgitter Flachstahl.
The speakers presented different approaches to cutting emissions and modernizing production facilities. Bianchi spoke about Arvedi’s ambition to combine decarbonization with high product quality and presented its ESP production model, which can produce 2.8 million tons of hot-rolled coil per year. The discussion also covered voestalpine’s Hy4Smelt demonstration project and the HYBRIT technology for producing direct reduced iron using hydrogen, presented by Pei. Börner and Helmers provided updates on their companies’ transformation programs.
Participants then discussed the use of hydrogen as a reducing agent in steelmaking and the obstacles to its widespread adoption. While achieving carbon neutrality will take longer than expected, participants reaffirmed their commitment to continuing investment.
“We will continue to invest in replacing blast furnaces with electric arc furnaces and expanding the use of sustainable feedstocks,” Pei said.
“We are at a critical juncture. Achieving carbon neutrality is difficult, and carbon capture still seems impractical. But we will not back down,” Bianchi stressed.
Another topic was how to reconcile emissions-reduction targets with the use of carbon-intensive processes during the transition. Speaking about the Power4Steel program, Börner described it as a combination of building new facilities and modernizing existing capacity, and urged a pragmatic approach.
“We need to find a way to produce green energy: the more clean energy is available, the more low-emissions steel we will be able to produce,” he said.
Marcegaglia: decarbonization must not undermine Europe’s competitiveness
The link between the transition to low-carbon production and competitiveness was the central theme of the next presentation. Antonio Marcegaglia outlined a principle of fundamental importance to the industry: decarbonization must not lead to deindustrialization.
Noting that emissions reductions had coincided with declining production volumes, Marcegaglia called for targets that reflect technological capabilities. He also argued that the Emissions Trading System (ETS) should primarily serve a regulatory function, and that speculative and financial interests should not take center stage.
On trade, Marcegaglia supported the recently introduced safeguard measures but called for them to be applied consistently and pragmatically. He said excessive market isolation could encourage indirect imports of steel in finished products and components, while limiting European companies’ ability to export goods. The Carbon Border Adjustment Mechanism (CBAM), he said, should also retain its role in offsetting the costs of the transition.
“I believe that CBAM, which is intended to offset the additional decarbonization costs incurred by European producers, must not become an instrument of protectionism,” Marcegaglia said.
According to Marcegaglia, excessive increases in steel prices could weaken downstream industries. This would push them to buy imported components that are not covered by the mechanism, reducing the value added created in Europe.
Clean energy: cost, availability and industrial policy shape the transition
Energy was the focus of the second panel, “Carbon-Free Energy Sources for European Industry,” moderated by Susanne Michelic of the University of Leoben. Participants included Alexander Fleischanderl of Primetals Technologies, Gabriele Imparato of Unicalce, Lutz Weber of Alpacem, Gabriele Guastafierro of Danieli Green Metal and Christian Kulik of TotalEnergies.
The participation of representatives from the cement and lime industries enabled a discussion of the interdependence of energy-intensive sectors. Imparato noted that about a third of the world’s lime is used in the steel industry, while Weber emphasized the complementary roles of cement and steel in infrastructure construction. The transition therefore requires coordinated action across several value chains that face common energy needs and decarbonization challenges. Kulik described the task in terms of the so-called “energy trilemma”: energy must be affordable, clean and reliable at the same time.
Participants stressed that technological advances alone are not enough to bring projects to fruition: appropriate regulatory and financing conditions are also needed.
“It seems the problem is not technology. We need to create a framework that provides clear direction on regulation and investment,” Imparato noted.
Guastafierro added that having solutions ready for deployment is only part of the journey. To complete decarbonization, these technologies must be adopted at a scale large enough to make them industry standards. In this regard, he highlighted the role of institutions and investment support mechanisms, including the planned EU Innovation Fund auctions for industrial heat.
Raw materials: quality and availability are reshaping the future of steelmaking
The day concluded with the panel “Where and How Will Iron Be Produced? Rethinking the Raw Materials Base and Production Geography in the Decarbonization of the Steel Industry.” Participants discussed changes in the raw materials base and production geography. The session was moderated by Felix Firsbach of Badische Stahl-Engineering. Participants included Naota Furuhata of Mitsui, Thomas Braun of Binding Solutions, Tiago Campos of SMS group and Jan Eisbacher-Lubensky of the University of Leoben.
Furuhata presented a forecast for trade in direct reduced iron and hot-briquetted iron (DRI/HBI). According to his figures, global trade in these products stands at 12.4 million tons, compared with 79 million tons for scrap. The estimates presented suggest that the market is likely to remain relatively balanced until 2030. What happens after that will depend on the availability of high-quality scrap and demand from new steelmaking projects.
Braun spoke about the growth potential of pellet production: if all announced projects go ahead, output could reach 190 million tons. Campos noted that high-quality iron ore is becoming increasingly difficult to find. He said technologies for efficiently processing low-grade raw materials need to be developed and deployed.
“Decarbonization is not only an energy transition, but also a challenge related to raw material quality,” Campos explained. He added that production solutions will need to be adapted to the resources and conditions of individual regions.
Decarbonization and competitiveness: the transition requires cooperation across the entire production chain
On the first day of the European Steel Forum, participants set out a shared direction and called for a more realistic approach to transition timelines and support mechanisms. Companies intend to invest in lower-emissions processes, but the deployment of new technologies still depends on the availability of clean energy and suitable raw materials, as well as on project economics. Europe’s steel industry will need to advance on all these fronts simultaneously through closer cooperation across value chains and industrial policies that align climate goals with the preservation of production and competitiveness.
Author: SteelOrbis editorial team