The European Commission has announced a new Action Plan on Steel and Metals to reinforce the competitiveness and resilience of the sector. The plan seeks to address rising energy costs, global market distortions, and the transition to low-carbon production, ensuring the industry’s long-term viability.
Commission President Ursula von der Leyen underscored the sector’s importance, stating: “The steel industry has always been a core engine for European prosperity. Next-generation, clean steel should therefore continue to be manufactured in Europe. That means we have to help our steelmakers who are facing strong headwinds on the global market. To make sure they remain competitive, we must reduce energy costs and help them introduce innovative, low-carbon technologies to the market. With today’s Action Plan, we are offering concrete solutions for a thriving European steel industry.”
Key measures in the action plan
The plan, developed following stakeholder consultations, including the Steel Dialogue on 4 March 2025, outlines several sector-specific priority actions:
- Energy security & affordability – The plan promotes Power Purchase Agreements (PPAs), encourages flexible energy taxation, and aims to reduce grid connection delays for energy-intensive industries. Greater use of renewable and low-carbon hydrogen will also be supported.
- Preventing carbon leakage – The Carbon Border Adjustment Mechanism (CBAM) will be strengthened to prevent “greenwashing” by non-EU producers. A review of CBAM is planned, with a legislative proposal by late 2025 to extend its scope to certain steel and aluminium-based downstream products.
- Industrial capacity & trade protection – With global overcapacity threatening EU manufacturers, the Commission plans to tighten existing steel safeguards and introduce a long-term measure before mid-2026. Additionally, the introduction of the “melted and poured” rule to determine the origin of metal goods is under consideration.
- Circular economy & recycling – The Commission will set targets for recycled steel and aluminium in key sectors and assess whether recycling requirements should be expanded to construction materials and electronics. Trade policies on metal scrap will also be reviewed to secure domestic supply for decarbonised steel production.
- Decarbonisation support – The upcoming Industrial Decarbonisation Accelerator Act will introduce sustainability criteria in public procurement, boosting demand for EU-produced low-carbon metals. Funding includes €150 million from the Research Fund for Coal and Steel (2026-27), €600 million through Horizon Europe, and a €100 billion Industrial Decarbonisation Bank, with a €1 billion pilot auction in 2025 focusing on electrification and decarbonisation of industrial processes.
- Protecting industrial jobs – The EU steel and metals industry employs over 2.6 million people, directly and indirectly. The European Fair Transition Observatory and Quality Jobs Roadmap, under the Clean Industrial Deal, will oversee employment impacts, ensuring workers’ rights are safeguarded.
Strategic importance of the sector
The steel and metals industry plays a critical role in key European sectors, including automotive, clean technology, and defence. With around 500 production sites across 22 EU Member States, the industry contributes approximately €80 billion to the EU’s GDP.
This Action Plan for Steel and Metals builds on previous measures under the Clean Industrial Deal and the Action Plan for Affordable Energy. It is the second sectoral plan introduced by the Commission, following the Automotive Industry Action Plan on 5 March 2025.
The measures outlined in the plan aim to ensure the sector remains competitive in the face of global challenges, while also accelerating its transition towards sustainability and climate neutrality.
