Europe needs to implement a climate policy that takes into account the positive effect the steel industry has on the broader economic value chain, according to German steel federation (WV Stahl) president Hans Jürgen Kerkhoff.

The global steel industry is suffering from structural problems that continue to hamper steel demand in Europe despite the region’s recent solid economic growth.

“We cannot see a locomotive for steel use like China in the past,” Kerkhoff said at the European Steel Technology and Application Days conference in Vienna on Monday. “We do not see a real adaptation in China to reduced demand… China is exporting its structural problems.” Moreover, in the advanced economies steel consumption has shifted from quantity to quality, he added.

Europe is still facing an “…import crisis,” Kerkhoff observed, with other countries taking over in supplying the continent after China was blocked by tariffs.

Major EU exporters, like Germany, are also suffering from export barriers. The US’ section 232 investigation on steel “…may have severe consequences” for Europe, Kerkhoff said at the event attended by Kallanish. “The isolation of the US market could lead to trade circumvention and even more imports flowing into Europe.” Protectionism is “…the wrong way” to support domestic industry, as free and fair competition leads to innovation, he added.

The Paris climate agreement is unlikely to level the playing field completely, according to Kerkhoff, as the EU is pushing its own climate policy that burdens industry, while other regions do not have restrictive policies.

Citing a Prognos study, Kerkhoff said the EU’s Emissions Trading System (ETS) would result in a -60% reduction in steel production in Germany, 380,000 job losses and a €3 billion loss to the German economy in 2030. For every €1 of demand in the steel industry, there is €3.1 of further demand in the economic value chain, the federation president said. Politicians must recognise this fact, he added.

Europe’s steel industry needs the EU to apply existing WTO measures, not protectionism, as well as implement a climate policy that takes industrial policy into account. Also required is financial support into research & development, and a public understanding of how steel contributes to a sustainable economy, Kerkhoff concluded.