The research titled “The State of the European Steel Transition” highlights that the industry is at a crossroads but that “there is a clear pathway to green steel” and this year is critical for advancing policies to drive the EU steel industry’s transition. 

This publication coincides with the release of the Commission’s Steel and Metals Action Plan (SMAP), itself designed to ensure that “clean steel production is commercially viable” but which was drafted without input from green or environmental NGOs, leaving the process vulnerable to the unbalanced influence of pro-fossil industry. 

The EU steel industry’s transition policies should include phasing out fossil fuel-based steel, scaling up  renewable hydrogen and renewable-powered production, strengthening circularity measures, and ensuring a just transition encompassing social protection for the industry’s workers.

Europe is currently a front-runner in near-zero emission steel innovation, but it faces intensifying competition from China and the Middle East and North Africa (MENA) region. “By investing in green steel technologies today, the EU will secure jobs and create resilience throughout the industrial value chain, as well as maintaining its early leadership in developing hydrogen-based direct reduced iron and electric arc furnace scrap-based steelmaking”, reads an extract from the report.

This research provides eight key policy recommendations designed to clean up Europe’s steel sector, which accounts for five percent of the EU’s total carbon emissions.

Top of the list is to end permitting for or investment in new-build or existing coal-fired blast furnaces. The European Commission must also insist on “timely, ambitious and transparent” transformation plans for existing facilities, while every effort must be made to ensure the new wave of hydrogen-based green steel projects remains on track. 

“The future success and competitiveness of European industry lies in rapid decarbonisation, targeted investments and scaling up green technologies, not by letting major polluters, like the steel industry, continue business as usual. Steel remains one of the most polluting sectors in the EU. Yet, according to our latest report, in 2023 alone, it received €11.3 billion worth in free permits to pollute, enabling the sector to emit carbon at no cost to itself, while society bears the burden,” said Camille Maury, Senior Policy Officer on Industrial Decarbonisation at WWF EU.

“Heavy industry, including the steel sector, is a crucial part of Europe’s economy, providing jobs and essential materials, but this comes at a heavy price in terms of emission, hurting climate and public health. To mitigate these effects substantial investments will be needed to decarbonise steel processes. However, industries benefiting from public money must commit to investing it in real decarbonisation solutions and ensure quality jobs for workers in the transition to a greener economy,” concluded Maury.