Ref. Ares(2020)3154891 - 17/06/2020
Cabinet of Commissioner Kadri SIMSON - Minutes of Meeting
MEETING CONCLUSIONS
Title
Meeting with CEOs of European Steel Industry
Date
18022020
Participants
Ext :
x
Tata Steel The Netherlands)
x
Arvedi)
x
, Eurofer)
x
BA Europe)
x
US Steel Kosice)
x
RIVA)
x
Celsa Group)
COM:
Kadri SIMSON (Commissioner for Energy), Stefano Grassi (Head of Cabinet), Kitti Nyitrai
(Member of Cabinet),
(Policy officer, DG ENER)
Ares initial request : No Registration
Disclosure authorization : ☒ YES ☐ NO ☐ Partial (pls highlight unauthorized parts)
Issues raised
CEOs of EU steel companies raised various points (based on slides they provided):
& follow-up
x The latest protectionist measures by the US prompted the diversion of Turkish steel
to the EU market. Together with the rising carbon price (to approx. 25€/CO2tonne
and that results rising production costs of EU companies) this is further eroding the
European industry’s margins in 2019, with the risk that EU industry reduces
production levels and risk of carbon leakage.
x Despite the industry’s increases in energy efficiency (by 30% since the 90’s), energy
costs are important and margins tight. Measures that avoid carbon leakage like a
Carbon Border Adjustment Mechanism (CBAM) are welcome. The mechanism
should come on top of the free ETS allowances (they claim that foreign steel
suppliers for which the EU represents a small market share could easily absorb the
extra costs from the measure). The mechanism should also not penalise steel
exports which are important for the industry.
x There sector is willing to decarbonise their industrial processes. The decarbonisation
of the industry in Europe is however expected to significantly increase the demand
for carbon free electricity (by additional 400TWh only for steel). There is fear that
this would push up production costs and make energy unaffordable. They noted the
difficulties in some countries to strike PPAs to procure renewable energy in
significant amounts.
x State aid compensations for the sector should be kept and the industry called for a
level playing field (i.e. all MS should provide compensations).
Compensation of
indirect ETS costs are important in particular for steel producers with Electric Arc
Furnace technology (Electricity accounts for 25% of their production costs).
C
ompensations under the Environmental and Energy Aid Guidelines should also be
kept or increased.
x The industry’s decarbonisation could be done through the use of
hydrogen and/or
the utilisation of
carbon capture and use technologies. That said, a supportive policy
framework that brings certainty and stability should be set to foster these costly and
long term investments.
The
Commissioner welcomed the exchange of views with the sector. She noted that
energy policy is one of the Community policies that address the complex mix of policies