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The steel and cement industries are set to play a key role in boosting the European Union’s economy, with the European Commission predicting that they will contribute at least 20% to the bloc’s total economic output by 2030, according to a document seen by Euronews.
The EU executive wants to revive manufacturing capacity across the bloc, reversing a long decline that has seen the bloc’s share of global industrial output decline from 20.8% in 2000 to 14.3% in 2020.
While the overall reindustrialisation process may drive prices up, the EU is prioritising bolstering its industry and reducing its dependence on countries such as China and the United States.
Some analysts say the real challenge lies in building alternative supply chains, noting that European industry will need financial backing to sustain desired production levels. To address the problem, the Commission aims to create so-called “lead markets” to align supply and demand.
“Establishing lead markets is pivotal to increasing the competitiveness of the key sectors and technologies, thereby strengthening the EU’s industrial base,” reads the document.
The document reveals that an upcoming Commission law will be designed to support energy-intensive industries in their decarbonisation efforts, speed up permitting, and introduce resilience and sustainability criteria for low-carbon goods.
The Commission is also considering including industries beyond construction and infrastructure, namely those that use EU-made materials, low-carbon materials, or both. The decision to do so will be based on how much they rely on and drive demand for energy-intensive materials.
When deciding which new industries to include, the Commission will consider the importance of the energy-intensive material relative to a given industry’s total production value. The EU executive will also assess how much demand for a given material an industry creates, especially as it grows.
Nuclear and hydrogen
Also featured in the Commission proposal are suggestions to support the construction of nuclear power plants and the manufacturing of hydrogen electrolysers to produce clean hydrogen.
“It is essential that the upcoming nuclear plants, both large-scale reactors and small modular reactors, prioritise as much as possible EU-sourced technologies and components while maintaining the highest quality standards,” reads the document.
The Commission argues that long-term EU sovereignty and sector resilience “hinge on new electrolysers sourcing their components predominantly from within the Union”.
These measures are part of the upcoming Industrial Accelerator Act (IAA), which the EU executive is due to present on January 29, after a first delay announced in December. The bill will focus on energy-intensive sectors, critical raw materials, and foreign direct investment.
The Commission will impose mandatory rules on foreign direct investment to prevent it from distorting the functioning of the bloc’s single market or having a detrimental effect on “security or public order”.
“Mandatory conditions on foreign direct investment are necessary to achieve the objective of maximising the benefits of these investments across member states, to strengthen the EU’s single market benefits,” reads the document.
Financial support via state aid is also poised to suffer some modifications under the IAA.
“Member states will likely be exempted from notifying the European Commission when it comes to funding decarbonisation projects,” one EU diplomat told Euronews.
“Made in Europe”
In the leaked document, the EU executive also touts the creation of voluntary labelling schemes for “Made in the EU” low-carbon products to help assess industry engagement, with the steel industry singled out in particular.
“The proposal for a label on the carbon intensity of steel is needed to provide a common EU approach on calculating GHG emissions, facilitating the differentiation of low-carbon steel from high-carbon alternatives,” reads the document.
The Commission is also expected to propose a target for the share of European products to be domestically produced under the upcoming law, with figures ranging from 60% to 80% floated as possibilities.
“By increasing the share of EU-made and low-carbon products in domestic consumption, the measure will boost demand within European market, strengthen industrial competitiveness, and reduce dependence on high-carbon or imported alternatives,” reads the document.