Kris Peeters: "Supporting the European steel industry is crucial for the transition to a sustainable and digital Europe".

MEP Kris Peeters (CD&V), together with some colleagues, has repeatedly called on the European Commission to support the European steel sector. In two letters, Peeters declares that the steel industry has been hit hard by the corona crisis and that there is a great need for action. So far, the Commission has only reacted partly to the proposal.

Even before the corona crisis, the European steel industry has been hit hard. Major investments were made with the aim of making European steel production climate neutral. In addition, there has been a fall in demand for steel, which has reduced the production capacity of European companies. COVID-19 saw demand fall by 50% in the second quarter of 2020 compared to demand in 2019. In addition, aggressive exports from third countries make the European steel industry more vulnerable.

Kris Peeters: "The current pandemic is the last straw that breaks the camel’s back for the steel industry. It is necessary to support this sector if we want to make the transition to a sustainable and digital economy. After all, if Europe strives to become climate neutral and support a general digitisation by 2050, it must also be recognised that the steel industry will play an important role in this transition, given the fact that this is an energy-intensive sector. European support must therefore be mobilised so that the sector remains competitive and can continue to invest to make its production process climate-neutral".

In a first letter sent on 7 April and a second at the end of May, Kris Peeters asked the Commission to adjust the existing tariff rate quotas in the context of the now second review of the EU Steel Guard. These tariff rate quotas guarantee that third countries can import an agreed quantity of steel products at better rates into the European Union.

The Commission launched a proposal on 29 May 2020, which was received well by the European Parliament. Together with other Members of Parliament, Peeters asks the Commission to take into account the consequences of the COVID outbreak. Kris Peeters: "Although the Commission's proposal is a step in the right direction, it remains rather weak. There is a need for a stronger plan, tailor-made to the current situation'.

A current proposal imposes specific quotas on countries with regard to imports of certain steel products. Subsequently, the Commission will abolish annual quotas by working with quarterly quotas. However, as countries can carry over unused quotas to a subsequent quarter, the measure misses its target. A reduction in the existing quotas, proposed by Kris Peeters, was not included in the current proposal. A reduction could prevent an abundance of imports from third countries.

The current pandemic and unfair competition with third countries threatens to become unsustainable for the European steel industry. Peeters acknowledges that the Commission includes the corona crisis in the proposal, but regrets that the situation does not lead to stronger measures. "The current proposal had already been drafted before the corona crisis broke out and therefore does not really take into account today's needs. The Commission is thus unable to deal with what may lead to a crisis in the steel sector', Peeters concludes.

Kris Peeters and his colleagues therefore hope for a ban on transferring quarterly quotas to the next cycle. In addition, the residual quotas should also be tightened by, for example, placing a 30% cap on the use for this purpose by large countries that already have a specific quota today.