The European Union (EU) Commission has unveiled its Action Plan on Steel and Metals, aiming to boost the competitiveness of these crucial industries while guiding them toward sustainability and a low-carbon future. The timing is critical, as these sectors are already dealing with high energy costs, growing pressures from global markets, and the pressing need for industrial decarbonisation.
The EU’s steel industry is a vital part of the economy, with far-reaching influence in industries like automotive, clean technology, and defence. To help the industry navigate these challenges, the Action Plan outlines six key areas that will drive more sustainable manufacturing practices.
Key Pillars of the EU Action Plan on Steel and Metals:
1. Affordable and Secure Energy Supply: Recognising that energy expenses constitute a significant portion of production costs in the metals sector, the plan promotes energy efficiency and renewable energy integration through:
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- Utilisation of Power Purchase Agreements (PPAs)
- Encouragement for Member States to apply energy tax flexibility
- Reduction of network tariffs to mitigate electricity price volatility
- Facilitation of faster grid access for energy-intensive industries
- Support for increased use of renewable and low-carbon hydrogen
2. Preventing Carbon Leakage: The Action Plan emphasises the importance of the Carbon Border Adjustment Mechanism (CBAM) to ensure a level playing field for EU industries. This will help ensure that imported metals are subject to the same carbon costs as those produced within the EU, discouraging businesses from relocating to countries with laxer environmental standards. The EU plans to expand CBAM to include more steel and aluminium products with additional measures to prevent circumvention. As a result, companies will need to conduct detailed carbon footprint assessments and environmental impact assessment.
3. Expanding and Protecting Industrial Capacities: Addressing the threat of global overcapacity, the EU intends to tighten existing steel safeguards. This includes proposing new long-term measures to protect the EU’s steel sector and assessing the introduction of the “melted and poured rule” to determine the origin of metal goods, preventing circumvention of trade defence measures.
4. Promoting Circular Economy: Recycling is a cornerstone of the EU’s plan to reduce carbon emissions and energy consumption in the metals sector. The Commission aims to set targets for recycled steel and aluminium, particularly in industries like construction and electronics. The Commission is considering regulations around recycling content in products. To ensure a steady supply of recycled materials, they are exploring trade measures on metal scraps, which will help decarbonise steel production.
5. De-risking Decarbonisation: To support the shift toward low-carbon industries, the upcoming Industrial Decarbonisation Accelerator Act will introduce resilience and sustainability criteria for EU products in public procurement. Significant funding is being allocated to support decarbonisation efforts, including €150 million through the Research Fund for Coal and Steel (2026-27), €600 million via Horizon Europe, and €100 billion through the Industrial Decarbonisation Bank. These measures will drive carbon neutrality and support the development of carbon capture and storage technologies.
6. Protecting Quality Industrial Jobs: With the steel and metals industry employing nearly 2.6 million people, the plan underscores the importance of active labour policies to support skills development and fair job transitions. Initiatives like the European Fair Transition Observatory and the Quality Jobs Roadmap will monitor employment impacts, ensuring workers’ rights are upheld in the pursuit of industrial ecology and sustainable practices.
How Life Cycle Assessment and Environmental Product Declarations Can Help
The EU Action Plan clearly highlights the need for businesses to strengthen their sustainability efforts with transparent, reliable data. As the CBAM expands, there is a growing emphasis on tracking carbon emissions across the entire supply chain, particularly for imported goods.
As a result, businesses will face increasing demands for accurate emissions reporting. Life Cycle Assessment (LCA) and Environmental Product Declarations (EPDs) are critical tools to help businesses measure, verify, and report embedded emissions, ensuring compliance with CBAM and supporting the development of low-carbon products.
To meet these requirements, companies need robust systems for carbon data collection, supply chain analysis, and emissions reporting. LCAs offer a cradle-to-grave analysis of a product’s environmental impact, helping optimise supply chains and drive sustainability. EPDs provide verified data on a product’s environmental performance, ensuring compliance and uncovering opportunities to reduce emissions.
At ESC, we know that the LCA and EPD process can be complex, especially for companies new to it. Our sustainability consultants offer strategic support to guide you through the process, ensuring compliance and identifying areas for sustainable growth. We help businesses conduct comprehensive life cycle impact assessments and leverage the results to improve product lifecycle management.
Looking to Align with the EU’s New Regulation?
Get in touch with us today to stay ahead of the curve in the European market. Our expertise in Life Cycle Assessment, Environmental Product Declarations, and carbon footprint analysis can help you implement effective industrial decarbonisation strategies and meet your sustainability goals.