Europe seeks to rescue steel industry

In an unprecedented move to protect the steel industry, the European Commission (EC) has just announced a series of measures such as tightening import quotas by nearly 50%, doubling taxes on shipments exceeding the allowed quantity, equivalent to 50%.

It is seen as a rescue for a sector once seen as a symbol of the Old Continent's industrial might, employing some 300,000 people.

The European steel industry is in a serious crisis. Photo: EU News

Steel mills, which were the “heart” of the industrial revolution in Europe, are no longer as strong as before and are facing unprecedented challenges.

In addition to competitive pressure, the European steel industry also faces the problem of balancing green development and production costs. These are the reasons why steel enterprises are facing a serious crisis. More than 18,000 workers will lose their jobs in 2024 alone.

The European steel industry, which employs 300,000 people directly in 20 member states, is facing a global overcapacity of up to 700 million tonnes, according to analysts. Despite having a production capacity of 135 million tonnes per year, steel mills in Europe are currently operating at only 70% due to falling demand.

The first reason is said to be the high energy prices caused by the cutoff of gas supplies from Russia. This has dealt a heavy blow to metal smelters, which are huge energy "addicts".

The second reason comes from cheap steel products exported from China, India and many other countries that are flooding the world market.

Recent figures show that Chinese steel accounts for more than 50% of total global production. Excess capacity and strong exports have increased trade tensions and forced countries to step up defense measures such as anti-dumping investigations...

In fact, the biggest barrier for European steel is the problem of technology transition. The European Union's (EU) "Green Deal" plan, with the goal of reducing carbon emissions to zero by 2050, puts enormous pressure on steelmakers to switch to cleaner technologies.

However, this requires huge investment costs. It is estimated that building a large-scale green steel plant can cost billions of euros. In addition, green steel is forecast to be 30% to 100% more expensive than conventional steel. Meanwhile, competitors continue to produce steel at low prices thanks to low energy costs and high-emission technology. This puts European producers at a serious disadvantage in the global market.

To protect this vital industry, the EU is taking action on many fronts such as building tough trade protection barriers, tightening quotas, allowing only 10% of the market to be open to steel from non-EU countries. Notably, the tax rate on shipments exceeding the quota will double, from 25% to 50%.

This is the "strongest protection clause" ever proposed for the European steel industry, said Stéphane Séjourné, EC Commissioner for Prosperity and Industrial Strategy.

The EC has also approved emergency state aid packages, allowing member states to provide financial help to steel companies to cope with high energy prices. Germany, France and Spain are leading the way in injecting capital to keep plants running and save jobs.

Notably, rather than just protecting old technologies, the EU is focusing on a technological revolution. The "Green Steel Pact" plan is at the heart of this strategy.

However, according to commentators, the EU's success depends not only on the right policies, but also on the ability to solve the energy problem, mobilize huge capital and maintain consensus across the bloc.

This is an existential challenge, determining whether Europe can both retain the “heart” of the industrial revolution and lead the revolution in responding to global climate change.

(According to EU News, Politico)

Source: https://hanoimoi.vn/chau-au-tim-cach-giai-cuu-nganh-thep-718937.html