Ref. Ares(2021)4414341 - 07/07/2021
From the Director General
Friday, 20 March 2020
Mrs Ursula von der Leyen
President of the European
Commission
Dear Mrs President,
The European Council on 26 March is set to focus on the fight against the
COVID-19 outbreak. Our
industry, which has been repeatedly qualified by EU institutions as one of the EU’s most strategic
sectors1, supports the measures taken on national and EU level. These should also guarantee the
smooth operation of our industry.
The impact of COVID-19 on our industry and its value chains, such as automotive and construction,
is huge. Orders are being cancelled, facilities are being closed, production reduced, and short-time
working hours introduced. In 2019, EU steel demand dropped by 12%, placing our industry in a
precarious situation. The virus outbreak in 2020 is very likely to cause a further, sudden and sharp
cut in EU steel demand (in the order of -30%).
Fragilized by a severe depression in demand, our industry is also facing the significant threat of
serious injury from new import surges in the second half of this year – which would occur were the
market to recover from its presently low base. Such a surge would be very disruptive given the
extremely uncomfortable situation the EU market and steel industry is in.
In this context, we urge the EU institutions and the Member States to consider the following
urgent measures:
• Adoption of the revision of the EU steel safeguards initiated by the Commission on 14
February already by April, reducing the liberalisation rate foreseen for 1 July 2020 from +3%
down to at least +1%, introducing a quarterly split-up of the yearly quota, eliminating the
unused quota transfer, and reducing the 30% cap on the total quota for individual exporting
countries.
• A significant EU steel import reduction over the full second quarter 2020 and beyond, if
necessary, in order to prevent global steel excess capacity being off-loaded onto the EU
market (the current EU safeguards alone will not be sufficient).
• Reset the benchmark based indirect costs compensation under the Emissions Trading
scheme (EU ETS) from currently 75% back to at least the original 85% and agree to apply it
in all member states.
• Introduce a ‘
force majeure clause’ into the EU ETS to guarantee that COVID-19 related
production and CO2 emissions cuts will not reduce the amount of post-2020 CO2 certificate
allocation.
• Avoid interference in material supply chains at the borders and secure continuance of safe
operation of steel plants across Europe.
On the green transition, the European steel industry proposes a
European Green Deal on Steel that
establishes a just transition and the right conditions, such that CO2-low and CO2-neutral steel can
find its place in the market despite the higher capital investment and operational costs. If we
recover from the current crisis and with the right legal framework in place, we have the ambition
1 Steel plants are also listed by the U.S.
Cybersecurity and Infrastructure Security Agency (CISA) on top of its list of the
Critical
Manufacturing Sector (https://www.cisa.gov/critical-manufacturing-sector)
EUROFER AISBL • Avenue de Cortenbergh, 172 • B-1000 Brussels • Belgium • +32 3 738 79 34
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From the Director General
to reduce our emissions by 30% by 2030 on top of what we have already reduced since 1990. Only
if the EU demonstrates that the decarbonisation of the sector is possible without risking its
competitiveness or market share as a result of CO2 abatement costs, will other regions of the world
follow our path. It is particularly important that Member States support the implementation of an
effective carbon border measure, in addition to the current ETS carbon leakage provisions, and
effective revised energy and environment state aid guidelines. The EU steel industry has set out
specific proposals in the
A Green Deal on Steel – Priorities for Transitioning the EU to Carbon
Neutrality and Circularity document, attached.
We welcome the Commission’s
New industry strategy for a green and digital Europe. However, this
needs now to be filled with concrete measures, and it needs to be measurable every year in terms
of progress. We call on the European Council to make specific reference to our industry’s proposal
for a
European Green Deal on Steel and the
Masterplan for a Competitive Transformation of EU
Energy-intensive Industries - Enabling a Climate-neutral, Circular Economy by 2050, that was
adopted at the end of November 2019 by the High-Level Group on Energy-Intensive Industries. This
Masterplan provides 190 recommendations on which a successful industrial policy for the
manufacturing sector needs to be based.
Steel as a circular, permanent material, is an enabler for the transition to a CO2-neutral circular
economy. In this respect, the Green Deal initiatives such as the
climate law and
Circular Economy
Action Plan need to be well aligned and complementary.
We remain at your disposal for any further information you may require.
Yours sincerely,
The European Steel Association (EUROFER)
Annex:
EUROFER – Towards a Green Deal on Steel
CC: Mr. Frans Timmermans, Executive Vice-President of the European Commission
Mr. Valdis Dombrovskis, Vice-President
Mr. Paolo Gentiloni, Commissioner for the Economy
Mr. Phil Hogan, Commissioner for Trade
Mr. Thierry Breton, Commissioner for Internal Market
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xxxxxxxxxxxxxxx@xxxxxxx.xx • www.eurofer.eu • EU Transparency Register: ID 93038071152-83