According to EU Dynamics, the upcoming EU Action Plan on Steel and Metals may take measures in the following areas: lower energy prices, fix some shortcomings of the EU's Carbon Border Adjustment Mechanism (CBAM), and promise to strengthen trade protection and market guidance. The plan is still in the revision stage and the final content may be changed.
According to two versions of the draft obtained by EU Dynamics, Europe could produce most of its steel and copper needs, but far less aluminum and nickel. At present, only 46 per cent of aluminium demand and 25 per cent of nickel demand are met by local producers.
"All of these metals are critical to national defense." Both drafts emphasize.
I. Energy measures
The draft mentions that the Commission is negotiating with EU countries on a "flexible clean aid instrument based on power purchase agreements and commitments on clean electricity use".
It also calls on member states to make full use of existing EU energy and state aid rules to reduce costs in energy-intensive sectors and promises to issue a series of new guidance documents, including conditions for early investment in grid projects and possible options for reducing grid tariffs in metals and other energy-intensive sectors. Both are expected to be released in Q2 2025. Before then, the commission also plans to promote electrification projects in energy-intensive industries to connect to the grid and propose relevant proposals.
However, the two drafts differ on how to proceed with an extension of the government's policy of compensating industrial companies for the carbon costs of using electricity. In the first draft, first published by German outlet Table Media, the commission pledged to "work towards making the mechanism permanent after 2030". The second draft, the EU's version of dynamic access, is more vague, saying only that it will ensure that "appropriate measures are taken".
Second, carbon border tax adjustment
The draft plan also foresees several changes to the EU's carbon Border Adjustment Mechanism. The CBAM is a mechanism to impose a carbon price on imported goods such as cement, steel, aluminium, fertiliser, electricity and hydrogen to level the playing field between the EU and countries with more lenient climate policies.
The draft promises that the commission will come up with "solutions" to compensate for the competitive disadvantage of EU exports to countries with looser climate regulations. The plan would be released as a nonbinding statement in the second quarter of this year, according to one draft, while another said only that it would "address the issue" without providing specifics.
In addition, the commission will propose CBAM anti-circumvention strategies and plans to extend the mechanism to certain downstream products of high consumption steel and aluminum in the fourth quarter of this year.
3. Trade protection measures
The draft plan also promises new trade tools to protect the EU from "global steel overcapacity", with measures to be published by the third quarter of 2025. The EU's current protection mechanism against low-priced steel imports is expected to expire in June 2026, but the document notes that "it is impossible to assume that the issue will automatically disappear by then".
Instead, the EU is ready to use trade defence tools to protect its aluminium producers who have been hit by recent US tariffs. One draft announced the launch of an aluminium safeguards investigation, while another said the commission was "ready to initiate an investigation as soon as it receives a request for sufficient evidence". The draft plan also proposes to launch an investigation into safeguards in the ferroalloy industry as soon as possible, and promises actions to promote a circular economy and clean metal applications, relying on leading markets to promote the widespread adoption of low-carbon metals.
"Lead markets, whether public or private, will guide low-carbon metals to become the market standard over time." The same is said in both drafts.
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