Axel Eggert is Director General of the European Steel Association (EUROFER) which represents the European steel industry. Present in Antwerp for the European Industry Summit, he sets out his expectations for the informal retreat of European leaders on 12 February at Alden Biesen and stresses the urgent need to bring down European electricity prices (Interview by Solenn Paulic)
Agence Europe - European industry met in Antwerp two years ago and called for concrete action to help it decarbonise while remaining competitive. Have things moved in the right direction since then?
Axel Eggert - Yes, for the first time, Europe has had an industrial policy. And that’s a good thing. We need to combine these objectives: competitiveness and carbon neutrality.
This is very important, also in terms of preserving quality jobs in Europe because the industry and certainly the steel industry is providing high quality jobs which are well paid. We have a ‘green industrial deal’ but this has to be brought to life. The Commission has done the first steps starting from the steel and metals action plan last March, and is implementing measures to combat the global overcapacity in our industry, which is offloaded at very cheap prices on our market.
We also welcome the new proposals to make the CBAM, the Carbon Border Adjustment Mechanism, more efficient. It is essential that those who want to trade with Europe have to pay the same carbon cost as European producers. What we need to do now is to tackle in particular the electricity price.
What specifically are you asking the EU to do?
When you go from very carbon intensive coal-based steel making to clean steel, then you need clean electricity. You use it directly or you produce clean hydrogen from that, but that has its price. But if we switch this over unilaterally, it has a huge impact on the cost. For this reason we are asking to bring down the electricity price across Europe to a maximum of €50 per megawatt hour (see EUROPE 13804/25).
Below this price, it will be difficult to attract investment for facilities that otherwise could not compete on the grounds of operational costs.
There are definitely measures which one could take because today for example renewable and clean electricity production is already much cheaper than gas-based or coal-based power production. But the current market is set up in such a way that the least efficient gas-fired or coal-fired plant sets the price, and this price is also passed on to the less expensive renewable electricity.
Member States can unilaterally take some measures. But we need measures across Europe. It doesn’t make sense that you have one-third of the electricity price in Scandinavia or in Italy. We are supposed to be a single market. So there’s a lot of work for policy-makers. Only a small amount of the revenue from the Emissions Trading System (ETS) is reinvested in decarbonising the industries that generate it. Most of this money goes to the finance ministries and they use it differently. So, one could use the ETS revenues to finance those companies going ahead with decarbonisation.
We are not asking to change the decarbonisation targets or for the ETS to be suspended. As an industry, all our projects being executed today could reduce the EU’s CO2 emissions by 5% with just 18 steel sites. But we need the right framework conditions.
Do you support measures such as European preference in public procurement?
Policy-makers need to look at how we can achieve the target without losing more skilled industrial jobs, because if we are not able in Europe to demonstrate to the rest of the world that decarbonisation works, who will?
We are on our way to that with, for example, the very important ‘Made in Europe’ policy. How can it be that the Member States agree on a target of a 55% reduction in CO2 emissions by 2030, but that, for public procurement, this policy persists because it is cheaper?
You have to use the option to support European industries that are decarbonising. That’s why we need European ‘lead’ markets for European companies.
And there’s no problem with a Japanese car being produced in Europe to support this approach, but if we import it, why should we give it specific tax support if these countries don’t have the same objective as Europe.
So this is very important that those who are really decarbonising should get preference. The UK and Canada have the same targets as Europe. They should also have preferential access to the European market.