However, the sector warned that if the measures are not effectively designed and implemented, they may fall short both in providing short-term relief and in achieving structural transformation.
EUROFER Director General Axel Eggert stated, “EU member states have taken a step in the right direction, but the quality and speed of implementation now represent a real test.” Highlighting the vulnerability of energy costs, Eggert added, “Even though Europe invests in low-cost renewable energy, the crisis in the Middle East shows how sensitive the industry is to fossil-fuel-driven price increases. If competitive electricity costs around €50/MWh cannot be ensured, energy-intensive sectors will be unable to compete globally and cannot carry out the energy transition.”
The European Steel Association noted that it supports the European Council’s call to accelerate the transition to renewable and low-carbon energy and the deployment of energy storage systems, while emphasizing that the benefits of the transition should be passed on to consumers as quickly as possible. The association also welcomed targeted short-term measures covering all components of electricity bills and a coordinated EU-level response to rising energy prices.
The sector supports the wider use of long-term instruments such as Power Purchase Agreements (PPAs) and Contracts for Difference (CfDs), and, in line with the Draghi proposal, emphasized that energy-intensive sectors should be able to access publicly supported electricity at production cost plus a fair profit margin. Current EU rules do not yet provide for this possibility.
It was noted that the EU’s current state aid framework needs to be made more flexible under the CISAF, combined with ETS indirect cost compensation, in line with European Commission President Ursula von der Leyen’s letter of 16 March and the European Council conclusions. In this context, removing restrictions and extending support periods are important.
EUROFER warned that the design of the electricity market, particularly the insufficient consideration of the role of fossil fuels in price formation, weakens the EU’s ability to protect industry from volatility and achieve meaningful price differentiation. The association stressed that even if the EU industry invests in decarbonization and switches to clean electricity, there remains a structural problem where prices still reflect fossil-fuel-based production. This results in companies indirectly bearing costs through electricity bills despite avoiding direct carbon costs, negatively impacting both competitiveness and the business rationale for decarbonization.
Comments
No comment yet.