Will EU's Clean Industrial Deal benefit stainless steel producers?

European stainless steel producers will be hoping to benefit from a new Clean Industrial Deal, unveiled by the European Commission yesterday (February 26).  

The new EU plan will aim to reduce energy costs, improve access to raw materials, encourage the procurement of domestically produced material and simplify the carbon border adjustment mechanism (CBAM). In implementing these and other measures, the Commission aims to halt deindustrialisation while meeting its target of making the EU a decarbonised economy by 2050.  

The EU’s Clean Industrial Deal states that EU “industries, particularly those facing high energy prices and fierce global competition, are facing existential challenges”.  

• This article was first published in MEPS International's Stainless Steel Review. The monthly report provides subscribers with steel prices, indices, market commentary and forecasts from 13 stainless steel markets in Asia, Europe and North America. Contact MEPS for details of how to subscribe.

MEPS’s February research shows that stainless steelmakers’ raw materials costs are currently low. Subdued demand has kept the price of nickel at USD15,000-15,500 per tonne in recent weeks, while chrome and molybdenum are stable and stainless steel scrap prices declined to levels last seen in December. However, high energy costs remain a key factor for European steel producers, undermining their ability to compete with low-cost Asian imports.  

Over 4.69 million tonnes of stainless steel were produced in Europe during the first nine months of 2024, with the continent’s largest steelmakers (Acerinox, Aperam and Outokumpu) utilising EAF-based production. Reducing the cost of electricity would help to cut EU mill costs, improving their viability.  

The European Commission has said that it will “counter guarantee” Power Purchase Agreements to make clean electricity more affordable for energy-intensive sectors. Furthermore, it plans to expedite the delivery of renewable energy projects by simplifying the permit process to ensure 100 gigawatts of renewable energy is added to the EU power grid in each of the next five years. This could further reduce the cost of renewable energy, while an uptick in energy projects may boost stainless steel demand in the near term.  

Circular economy: a renewed focus on recycling  

In a bid to both decarbonise industry and reduce its reliance on imported material, the EU’s Clean Industrial Deal also emphasises the need for a renewed focus on a circular economy. The draft documentation said that this was “key to maximising the EU’s limited resources”. This could result in tighter control of stainless steel scrap exports. Data published by worldstainless indicates that Europe exports over three million tonnes of stainless scrap each year.   

MEPS respondents that continue to report concerns about the full rollout of CBAM, in 2026, will also be encouraged by further assertions that the regulation must be simplified. A review of CBAM will be presented in the second half of this year, with a further legislative proposal in early 2026. A new EU labelling system will also be established for domestically produced low-emission steel.  

The European Commission asserts that six business drivers will help it achieve the goals set out by its Clean Industrial Deal. They are: affordable energy; lead markets for low emissions steel; financing; circularity and access to materials; global markets and international partnerships; and skills.  

During February’s research, EU market participants’ main focus was on the need for an improvement in demand, however. The March 12 application of 25% tariffs of stainless steel imports into the United States is a major concern. Some may question whether efforts to leverage “global markets and international partnerships” may become increasingly challenging in a climate of growing protectionism.