Europe’s steel sector is in crisis. The obvious culprit is the continent’s high energy prices, now further escalating in the wake of the Iran war. But the deeper problem lies elsewhere: the industry risks returning increasingly fewer profits to company bosses and shareholders. Amid their troubles, there’s an opportunity for the Left to make a strong case for public ownership of the steel sector and for a wider reform of European energy markets.
Today, with gas prices in Europe having already surged by 70 percent following the illegal US-Israeli war on Iran, the continent’s energy-intensive industry is once again on alert. The steel sector is no exception. This comes on top of pressure from cheap steel imports and global overcapacity, which, according to the industry, present an “existential threat to European steelmaking.”
But the EU’s crisis lies much deeper.
The bloc’s steelmakers often blame global competitors, and particularly the world’s largest steelmaker, China, for flooding the market with too much steel. Yet Europe has its own overcapacity issue. While the EU’s installed capacity hovers at around 198 megatons of potential annual output, its domestic steel production sunk to 125.8 megatons in 2025: what the industry calls a “historic low.” Continually weak demand in steel-using sectors like auto manufacturing and construction has pushed steelmakers to decrease output.
Steel production has recurrently faced such crises in Europe. Today, however, a second crisis adds to the first: decarbonization. Steel is one of the world’s most polluting industries, responsible for 8–10 percent of global emissions.
This pressure to decarbonize is set to reach new heights, seeing as conventional fossil fuel–intensive steelmaking, which uses blast furnaces, is projected to become increasingly uncompetitive in the EU during the 2030s, as a result of carbon pricing. The EU institutions are largely focused on propping up private steelmakers’…
Auteur: Alexandra Gerasimcikova
