If one thing is clear in Europe, it is that domestic steel and stainless steel mills have lacked the will to make new investments in their outdated production methods for years. Without subsidies from the EU or the member states, nothing will work in Europe when it comes to steel. And this is not a new or surprising realisation; Brussels has known this for decades.
‘European steel pact’ – Speeding in a one-way street
The position paper recently submitted by the German section of the European People’s Party (EPP) in the European Parliament calling for a ‘European steel pact’ shows this very clearly once again and also whose child this position paper was in the end.
Read also: ‘European steel pact’ – CDU/CSU in a one-way street
Steel and stainless steel from Europe have become old
It is the fear of the multinational Western steel groups, which cook steel and stainless steel in Europe with completely outdated steel mills and technologies, and which have once again whispered the tale of evil stainless steel from Asia into the ears of Members of the European Parliament. Of the flood of cheap steel that could sweep across Europe if more protection were not granted and subsidies paid.
Important evidence of this perfidious strategy and that politicians are happy to be made into compliant victims here, in addition to the EU Safeguard measure on certain steel products, which has been extended until 2026, the bureaucratic CBAM bungle and the two anti-circumvention proceedings against flat-rolled stainless steel from Indonesia.
CDU/CSU: WTO-incompatible? We don’t care!
The demand for a WTO-incompatible replacement for Safeguard and thus also illegal double taxation at the EU’s external borders with regard to CBAM seems to have been overlooked in the CDU/CSU offices in Brussels. The fact that the lobby organisation of EU steel mills EUROFER has jumped on this bandwagon of announced breaches of law and treaties and fully supports the demands shows the attitude of the steel mills towards the rule of law structures in Europe.
The EU steel mills’ fear of Asia
The fear of the EU steel mills does not come from the allegedly cheap stainless steel from Asia. Rather, the fear comes from the fact that European steel production in its current form belongs on the scrap heap of technological history. Investment in genuinely new steel mills that produce steel and stainless steel using state-of-the-art (SOTA) processes has been virtually non-existent for years. And this refusal to invest, especially with regard to reducing CO2 emissions, has persisted for more than a decade. Apart from a decline in the production of steel, no significant CO2 savings have been achieved for the last ten years.
Asia outstrips Europe in innovation and emissions
And while the Europeans have spent the past decades milking the proverbial cow behind their state barbed wire fence, new state-of-the-art steel mills have been built in Asia. With production methods such as the RKEF-AOD process in Indonesia and China. These mills can not only produce stainless steel with up to 25% less energy than the old Electric Arc Furnaces (EAF) in Europe, but also emit less CO2 using renewable energies and a scrap content of at least 90%. There is no longer any trace of the outdated steel mills that Europe (e.g. Thyssenkrupp, Westfalenhütte, Dortmund, Germany, 2002) sold off to Asia until the early 2000s.
The bogeyman of overcapacity and dirty steel
Nevertheless, Brussels is still endeavouring to spread the spectre of overcapacity (which it has plenty of itself) and dirty steel production. In order to justify the Carbon Border Tax CBAM, even though it is full of formal errors and is demonstrably based on false data and assumptions. The call for import quotas for steel from EAF production for CBAM shows this clearly. Just by using green energy and a little more scrap in the EAF, steel and stainless steel suddenly become CO2 friendly. Of course, it can’t be that the whole world is suddenly producing green steel. Brussels and the corporations didn’t plan it that way!
Asia has the better demographic outlook
While the population in EU Member State Germany, for example, is getting older and older and the next generation no longer wants to ruin their health for faceless investors and interchangeable corporate leaders, there are still large population groups in many parts of the world that are in a much better demographic position. Labour is easier to find and retain in Asia. Be it through education and training, health insurance or simply fair and reliable pay.
This can be seen, for example, at a well-known Chinese stainless steel producer, which has not only invested in state-of-the-art equipment and environmental protection, but also in extensive training programmes and thus shows its workers more appreciation than some (Southern) European stainless steel mills.
What does Europe need now?
The European steel and stainless steel industry does not need any more protectionism based on hypocrisy and lies. What Europe needs is a spirit of optimism. The will to take entrepreneurial risks again. And significantly less bureaucracy that only serves the self-preservation of state and European institutions. Europe must free itself from old and ossified structures and dismantle market blockades and trade barriers.
If a few steel oligopolies fall by the wayside in the process, that is no big deal. European SMEs are desperately looking for qualified employees and are more than willing to show them the necessary appreciation. And would be happy to receive more attention from Brussels for a change.
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