Steel and base metals have long been fundamental to Europe’s economic strength and industrial identity. Today, however, the European Commission has sounded the alarm over the increasing challenges threatening the future of these critical sectors.

In a detailed communication to the European Parliament, the Council, and other key institutions, the Commission has outlined a stark assessment. High energy costs, an uneven global playing field, urgent decarbonisation needs, and growing regulatory burdens are placing immense pressure on Europe’s steel and metals industries. Without robust action, these sectors risk decline, with serious consequences for strategic sectors such as defence, construction, automotive manufacturing, and technological innovation.

Over the past decade, Europe’s share of global steel production has shrunk to 7-8%, while primary aluminium production has fallen to just 3.8%. Meanwhile, nations like China and India have dramatically expanded their production capacities, often with heavy government support. In 2024 alone, global steel overcapacity was estimated to be more than four and a half times higher than the European Union’s annual consumption.

Despite producing 90% of its domestic steel demand and 83% of its copper needs, Europe’s ability to meet growing demand for aluminium and nickel is falling sharply. The EU currently covers only 46% of its aluminium needs and 25% of its nickel requirements, two materials whose strategic importance is rapidly increasing, particularly in defence and clean technologies.

The Commission also drew attention to the essential role metals play in Europe’s security and resilience. Modern battle tanks, for example, require between 50 to 60 tonnes of high-quality steel; fighter aircraft rely on about three tonnes of aluminium. A stable, resilient supply of such materials is critical for European defence and technological autonomy.

Yet, investment challenges are mounting. Europe’s metals industries are committed to decarbonisation, but they face weak financial incentives. In 2022, the sector accounted for 8.1% of EU greenhouse gas emissions, but tight margins, overcapacity, and insufficient customer willingness to pay a „green premium” make clean investment strategies difficult. Major players, such as ThyssenKrupp, ArcelorMittal, and Liberty Ostrava, have recently announced layoffs, delayed decarbonisation investments, or even bankruptcy, raising further concerns.

Production decline trends are also clear: EU steel output fell from 160 million tonnes in 2017 to 126 million tonnes in 2023. The current capacity utilisation rate of about 65% is unsustainable for a sector that needs to operate at over 85% efficiency to remain globally competitive.

Faced with these urgent risks, the Commission stressed the need for immediate and comprehensive support measures. Initiatives such as the Clean Industrial Deal and the Action Plan for Affordable Energy aim to lower energy costs, stimulate low-carbon markets, and leverage investment — but the depth of the crisis demands sector-specific strategies.

The Commission has positioned the metals and steel sectors as pivotal to the EU’s future economic security, industrial resilience, and environmental goals. Ensuring their survival and competitiveness is no longer optional — it is a strategic imperative.

The first step, as outlined, will involve stabilizing energy costs, boosting demand for low-carbon products, and levelling the international playing field. Subsequent stages will focus on building robust lead markets for green steel and metals and reinforcing Europe’s supply chain resilience.

Today’s communication marks a clear recognition: the future of Europe’s steel and metals industries will define the future of Europe’s economic and strategic sovereignty.