RePowerEU: EU policies must secure energy supply and accelerate hydrogen infrastructure to support transition of steel industry, warns EUROFER

Brussels, 18 May 2022 – Brussels, 18 May 2022 – An overhaul of the European energy system with industrial consumers at its heart is essential to overcome both the current energy and climate crises, as EU industry will be the main driver of clean energy markets. In particular, short-term relief measures for companies affected by high energy prices, the rapid realization of hydrogen infrastructure and priority access to hydrogen supplies for the sector should be granted immediately, while avoiding gas supply interruptions as long as no alternative infrastructure is available. These are the main lessons of the Energy Manifesto of the European steel industry, published on the occasion of the publication of the European Commission’s communication on RePowerEU.

“Without strategic industrial energy consumers like steel on board, the energy transition will not be successful. Energy-intensive industries must be integrated into all levels of policy-making and policy discussions as key enablers for the decarbonisation and independence of the European energy system,” said Axel Eggert, Managing Director of the European Steel Association (EUROFER). “The steel industry’s rapid access to green hydrogen will boost hydrogen markets in Europe. But alternative gas supplies other than Russia will remain crucial as long as no affordable hydrogen infrastructure is available. We need a review of the EU energy strategy for the sake of cohesion, cooperation and cross-sectoral dialogue,” he added.

The combined effects of the energy crisis and Russia’s invasion of Ukraine have added further hurdles on the road to decarbonising the EU steel industry, as the EU is not ready to provide sufficient quantities of low-carbon energy carriers. This highlights the urgency of establishing the right conditions at EU level to support the transition to climate neutrality.

The EU’s new energy strategy should pursue short- and medium-term measures to tackle current challenges, ensuring security of gas supply and swiftly implementing previous EU toolbox measures. EU to mitigate the impact of soaring prices on European industry.

At the same time, the review of the EU energy system must include a long-term strategy ensuring cost-effective energy consumption and access for industrial sectors as catalysts for the energy transition. The European Green Deal and the Fit-for-55 package must be adapted accordingly. The first strategic objective is to make clean energy available and to allow access to it in large quantities at an affordable price to achieve the objectives of climate neutrality and sectoral energy.

“At the moment, there is no hydrogen economy or infrastructure for the steel sector. Our industry alone will need more than 150 TWh of ‘clean’ electricity – half of it for hydrogen production – by 2030 to run its 60 low-carbon projects in the EU. These needs are equivalent to twice the electricity consumption of Belgium,” said Mr. Eggert.

In particular, the EU must redouble its efforts to achieve strategic autonomy and ensure the economic resilience of key industrial sectors such as steel by improving their transition by:

• grant priority access to the supply of hydrogen and to existing networks for the sectors ready to consume it and presenting the greatest potential for CO2 reduction;

• provide concrete instruments to steer investments in on-site infrastructure for hydrogen as quickly as possible;

• guarantee flexible application of the additionality principle and correlation criteria for hydrogen production, avoiding unnecessary production and therefore consumption ceilings;

• ensure rapid approval of low carbon steel projects in all European funding instruments (ie CEEAG and IPCEI) and frontloading of the Innovation Fund;

• remove administrative burdens for renewable energy projects, including hydrogen projects;

• Promote power purchase agreements (PPAs) beyond 2030 for industry, including hydrogen.

“The European Commission must take a bold approach and develop a coherent framework to support energy-intensive industries in the transition. Affordable energy is key to achieving EU climate goals and industrial consumers are key players,” concluded Mr Eggert.

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Notes for Editors

Contact

Lucia Sali, spokesperson and communication manager,

+32 2 738 79 35, (l.sali@eurofer.eu)

About the European Steel Association (EUROFER)

EUROFER AISBL is located in Brussels and was founded in 1976. It represents the entire steel production in the European Union. EUROFER members are steel companies and national steel federations from across the EU. Major steel companies and national steel federations in the UK and Turkey are associate members.

The European Steel Association is registered in the EU Transparency Register: 93038071152-83.

About the European steel industry

The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around 125 billion euros and directly employs around 310,000 highly qualified people, producing an average of 153 million tonnes of steel per year. More than 500 steel production sites in 22 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with European manufacturing and construction industries, steel is the backbone of development, growth and jobs in Europe.

Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by industry make the modern world possible. Steel is 100% recyclable and is therefore a fundamental element of the circular economy. As a basic engineering material, steel is also a key factor in the development and deployment of innovative technologies that mitigate CO2 emissions, improve resource efficiency and promote sustainable development in Europe.

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