Measures for the EU steel industry

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Measures for the EU steel industry

The extraordinary Competitiveness Council met in Luxembourg on 9th November to discuss the serious challenges faced currently by the European steel industry.

The EU steel sector suffers from major global overcapacity in production, which pushes down prices and encourages trade distorting behaviour from competing regions. High energy costs are eroding margins and the resulting closure of steel plants is costing thousands of jobs.

The Council agreed on the gravity of the situation as well as on the need to take concrete actions that will help ensure the long-term viability of a modern European steel sector.

Etienne Schneider, Deputy Prime Minister and Minister for Economic Affairs of Luxembourg, who chaired the meeting, said he was: “very satisfied with the outcome of the meeting. It is the role of our Council to examine all issues which have a significant impact on European competitiveness” he added, underlining that

“there is a clear and urgent need to deal with the crisis of the steel sector in a comprehensive manner. We agreed on concrete action points, such as making best use of available trade defence instruments and of possibilities which exist under the EU state aid framework and the Juncker plan, and to follow up on this meeting soon.”

The Council considered that speficic measures should be part of a comprehensive approach aiming at creating competitive framework conditions for EU industry as a whole, including through a predictable and consistent regulatory environment as well as measures to stimulate innovation, since many of the issues faced by the steel sector are shared by other energy intensive industries. In this respect, a number of delegations requested a review of the implementation of the Action plan for a competitive and sustainable steel industry in Europe, adopted by the Commission in June 2013.

Taking into account the results of the Council discussion, the Presidency considers that some concrete actions should be taken as a matter of priority.

Member States are invited to intensify or launch discussions involving all important steel producers in the context of the OECD Steel Committee and through the Commission’s bilateral steel dialogues with third countries like China, Russia, Belarus, Turkey and India.

The Council also invites Member States to make full and timely use of the full range of EU trade policy instruments to ensure a global level playing field and to address restrictive measures in third countries in particular as regards the steel sector.

Trade Defense Instruments shall be modernised through a constructive approach, to expedite their operation, increase transparency, predictability, effectiveness and enforcement.

The meeting conclusions also suggest further improving access for the EU steel industry to third markets, including through public procurement, bilateral and multilateral negotiations and implementation and making full use of the Investment Plan for Europe to upgrade and modernise the steel sector through use of the European Investment Advisory Hub and the European Fund for Strategic Investments.

The revised State Aid rules should also be a tool to support Energy Intensive Industries in R&D&I, training, environment, employment and ETS costs, while available EU instruments and funding – such as the European Globalisation Adjustment Fund and the European Social Fund – must be better used for upskilling workers and facilitating their reintegration into the labour market in case of mass redundancies in any industrial sector, including the steel industry.

To improve the competitiveness of sectors most at risk of carbon leakage – including the steel industry – Member States were asked to consider, as part of the ongoing reform of the European emissions trading system (“EU ETS”), a more focused mechanism for free allocation of allowances, for example through a tiered approach.

Recalling the conclusions of the October 2014 European Council meeting, the Presidency also stressed the need for elements to minimise the need for a crosssectoral correction factor by the end of ETS phase IV, while creating the right incentives for industrial innovation and enhancing the possibility to increase production levels.

Moreover, the Council sees the need to support the swift implementation of the European Energy Union, in order to ensure access to secure, affordable and climate-friendly energy while fully exploiting the possibilities under the forthcoming Communication on the Circular Economy.

To follow up on this extraordinary meeting of the Competitiveness Council, Member States agreed to call for a special High Level stakeholders’ conference, involving the social partners, to review the current situation and consider policy actions, in the context of the ongoing work of the High Level Group on Energy Intensive Industries.

The implementation of the 2013 European Steel Action Plan should be assessed in the context of that meeting.

Filippo Giuffrida Répaci

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