The European Commission (EC) has released a policy paper setting out how the European steel sector can overcome its short-term and long-term challenges with support of European Union member states and EU institutions.

“A joint effort is needed to overcome these serious challenges fueled by global overcapacity, a dramatic increase of exports and an unprecedented wave of unfair trading practices,” the paper said. “High energy costs and changing market conditions require energy-intensive industries to adapt and innovate to ensure their long-term competitiveness and sustainability.”

The paper outlines short-term measures to strengthen the EU’s defense against unfair trade practices as well as longer-term action to bolster the long-term competitiveness of the steel industry.

The EC has already imposed a record number of measures to offset the detrimental effect of dumping, with 37 anti-dumping and anti-subsidy measures in place on steel products (16 on steel imports from China). The EC “will further accelerate the adoption of anti-dumping measures,” the paper said. “The removal of the so-called lesser duty rule in certain circumstances would allow imposing higher anti-dumping duties.”

The EC is also proposing a prior surveillance system on steel products when import trends threaten to cause injury to European Union producers.

In addition to measures aiming to address global overcapacity, the EC is tackling the underlying causes of the problem. The EU recently held bilateral meetings on the subject with China and Japan.

The long-term competitiveness of energy-intensive industries like depends on their ability to develop breakthrough technologies in areas such as energy efficiency or carbon capture and utilization, according to the EC paper. “This requires more private and public investment in innovation, research and new technologies,” it explained. “At EU level, various funds are available to support the steel industry on its modernization path.”

These funds include the €315 billion European Fund for Strategic Investments, which has already supported the modernization of a steel factory; EU Structural and Investment Funds; and the EU research funding program Horizon 2020.

“Maintaining a modern and competitive steel industry requires a skilled and well-trained work force,” the paper noted. The EC’s forthcoming New Skills agenda aims to build commitment to invest in people and their skills in close cooperation with member states and social partners. The European Globalization Adjustment Fund and the European Social Fund are available to support workers and their local communities, mitigating the social consequences of relocation.

The EC’s revised state aid rules provide opportunities for member states to support crossborder technology, research, and innovation and renewable energy schemes. The proposed revision of the emission trading system could be helpful for the steel sector to ensure that it gets an appropriate level of emissions allowances, the paper said.

“We must do more to help the steel sector and other energy-intensive industries adapt, innovate and compete on the basis of quality, cutting-edge technology, efficient production and a highly skilled workforce,” said Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness. “We now have a record level of anti-dumping measures on steel products in place and the commission is determined to restore a global level playing field. We will take steps to further streamline our procedures but member states must also act together and urgently adopt our legislative proposal to modernize EU trade defense instruments and make fairer trade a reality.”