The IAA's omission of "Made in the EU" puts steel investment at risk
The European Commission's long-awaited Industrial Acceleration Act (IAA) has not helped EU steel purchases with low emissions, undermining previous hopes for increased demand.
The law, unveiled on March 4, does not include the previously expected "Made in the EU Mandate for the use of domestic steel in government projects. In addition, it failed to implement a green steel labeling system for EU steel. These two functions were designed to help create "leading markets" for low-emission steel in the EU and increase demand for domestically produced materials.
Instead, the IAA's main steel-focused policy is to implement a more general government procurement mandate, which provides for a 25-day guarantee.% demand for low-emission steel from 2029. There is no need to use domestic steel
John Carruthers—Green, a steel market analyst and member of the European Parliament, said: "The European Commission has repeatedly stated its intention to support the steel industry in the region. However, although CBAM and trade protection measures are currently supporting prices, the absence of a "Made in the EU" procurement requirement suggests that the final act did not include some of the tougher measures aimed at stimulating demand that many in the sector had expected, potentially leading to some Uncertainty about long-term investments in low-yield, low-emission steel production facilities."
The European Commission documents published this week highlight the role of CBAM and the current EU import protection measures lifted on July 1 in maintaining demand for EU steel products.
In addition, the concept of green labeling has not been abolished. Instead, it could be adopted within a regulatory framework such as the Regulation on Ecodesign for Sustainable Products (ESPR)).
Rising prices, stagnating demand
The average price of a hot-rolled roll in Europe, according to MEPs, has increased by more than 15% since the lows of July last year. Respondents to the MEPS survey for the European Steel Review expect regulations restricting competition from steel imports to remain a key factor in further price increases, with few reporting a sharp increase in demand. As previously reported by MEPs, the unfolding crisis in the Middle East is also likely to put upward price pressure on the cost of raw materials and energy prices, potentially reducing the profit margins of steel mills.
European Steel producers and steel sector associations