Italian steel federation urges EU for industrial policy for sector's survival

Italy's steel federation, Federacciai, has called for the urgency of a true European industrial policy where important tools as the proposed import measures, together with the CBAM and affordable energy costs, are key for the survival of the Italian and European steel industry.

"In Bruxelles is where the major decisions must be made to avoid Europe's geopolitical, economic, and industrial irrelevance in a world that is changing at very high speed," Antonio Gozzi, President of Federacciai said opening the 2025 Public Assembly of the Association, which took place Nov. 10 in Bergamo, North Italy, in the presence of the European Commission Executive Vice-President for Cohesion and Reforms, Raffaele Fitto, the European Commission Executive Vice-President for Prosperity and Industrial Strategy, Stephane Sejourne, and the President of Confindustria, Emanuele Orsini.

Gozzi said that while US tariffs would have limited direct impact on Italy -- whose US shipments represent less than 1% of national output -- the indirect consequences could prove devastating.

"We are heading straight into a trade-diversion shock," Gozzi said, warning that China's structural overcapacity and export dependence would redirect volumes toward Europe.

Policy challenges

Gozzi cautiously backed CBAM as "indispensable" but warned it risked accelerating European blast furnace closures without adequate safeguards. The phase-out of free emissions allowances could push carbon prices to $200 per metric ton, making primary steel production uneconomic, he said.

"Without a realistic glidepath, we are heading toward the shutdown of Europe's last blast furnaces -- and with them, our strategic capacity to produce key grades of steel," Gozzi told the assembly.

He criticized the EU's focus on hydrogen-based steelmaking projects as "absurd" failures, advocating instead for carbon capture technologies at existing blast furnaces.

Energy costs remained his primary concern, with Europe's marginal pricing system -- which sets power prices based on gas-fired generation burdened by ETS costs -- undermining competitiveness.

Gozzi praised Italy's upcoming Energy Release scheme offering renewable electricity at Eur60-65/MWh to energy-intensive industries, but said Europe lacked coherent long-term, affordable energy planning. He called for cross-border agreements allowing direct power purchase agreements with producers, including France's nuclear operator EDF.

The Federacciai chairman urged the adoption of "Buy European" obligations requiring 60% EU sourcing in public procurement, echoing recent comments by German Chancellor Friedrich Merz.

Sejourne indicated EU procurement rule revisions could boost European steel demand.

A regulatory dispute over "green steel" definitions is adding uncertainty. Draft EU proposals would label blast-furnace steel achieving 20% emissions reductions as green, despite absolute emissions remaining seven to eight times higher than electric-furnace steel. Italian producers, generating nearly 90% of output via electric arc furnaces, condemned this as "greenwashing."

Italy's steel production fell 5% to 20 million mt in 2024, with sector turnover of Eur40-60 billion annually and over 70,000 direct jobs. Gozzi expects 2025 output to match 2024 levels, with recovery dependent on new safeguard measures expected to be put in April 2026.

Platts, part of S&P Global Energy, assessed domestic hot rolled coils in Southern Europe at Eur595/mt ex-works Italy Nov. 10, stable day over day, while Southern Europe HRC was unchanged at Eur490/mt CIF.