Towards a European Steel Pact: Integrating the Steel Industry into the Heart of the Clean Industrial Deal to Strengthen Europe’s Industrial Sovereignty

Europe finds itself at a historic crossroads. The dual challenges of industrial competitiveness and climate neutrality are converging in ways that will define our continent’s future. Nowhere is this more apparent than in the steel sector, an industry that stands not only as a bedrock of our industrial fabric, but also as a key enabler of the green transition. As we shape the Clean Industrial Deal, it is time to place steel where it belongs: at the very heart of our strategy for a resilient, sovereign, and climate-neutral Europe.

Steel is Europe’s industrial spine. It underpins critical sectors. From automotive to construction, from wind turbines to railways. It is not merely a material; it is a strategic asset. Yet over the past two decades, we have seen this pillar of European strength weakened by a toxic combination of global overcapacity, unfair trade practices, and rising production costs.

At the same time, the steel sector is under growing pressure to decarbonise, a goal we share, but one that must be met with realistic pathways and a robust industrial policy.

This is why I strongly advocate for a European Steel Pact: a comprehensive, forward-looking policy framework that embeds steel production into the core of our Clean Industrial Deal. Such a pact must serve two fundamental objectives: achieving climate neutrality in steel production and reinforcing Europe’s industrial sovereignty.

Clean Steel, Competitive Steel

Europe’s steelmakers are not standing still. Many are already pioneering breakthrough technologies like hydrogen-based direct reduction, carbon capture, and circular production systems. However, innovation alone will not suffice. Without a coherent European strategy that combines environmental ambition with industrial realism, these efforts risk faltering.

We need to recognise that green steel is not just a climate imperative but also a global race. The U.S. Inflation Reduction Act and China’s state-backed steel capacity expansion are reshaping competitive dynamics.

If Europe wants to lead, we must ensure a level playing field. That means accelerating access to decarbonised energy, scaling up hydrogen infrastructure, and simplifying the permitting process for industrial transformation. It also means deploying instruments like the Carbon Border Adjustment Mechanism (CBAM) not as a punishment, but as a shield for European industry and a driver for global standards.

Strategic Autonomy Begins with Strategic Materials

The debate around “open strategic autonomy” is rightly gaining traction. Nevertheless, we cannot speak of sovereignty while outsourcing the foundations of our economy. If Europe becomes dependent on foreign steel, especially from countries with lower environmental and labour standards, our green transition will be neither just nor secure.

A European Steel Pact must therefore commit to preserving and modernising domestic steelmaking capacity. We must view steel not as a legacy burden but as a strategic sector.

Public support mechanisms, whether through the Innovation Fund, IPCEIs, or a revamped EU industrial policy, must prioritise green steel projects and secure long-term investment. At the same time, we must foster a climate of social partnership, ensuring that workers are part of the transition and that no region is left behind. 

An Industrial Policy That Delivers

For too long, Europe has hesitated to embrace a proactive industrial policy. This must change. The Clean Industrial Deal offers a unique opportunity to reshape the relationship between climate goals and economic development. However, to be credible, it must be grounded in the reality of our industrial base.

Steel offers a test case. If we can develop a competitive, low-carbon steel industry in Europe, we can do the same in cement, chemicals, and other energy-intensive sectors. Nevertheless, this requires coherence. We cannot, on the one hand, impose ever-stricter climate targets, and on the other, delay the rollout of support frameworks. We cannot promise green jobs while turning a blind eye to deindustrialisation.

This is where political leadership comes in.

The Clean Industrial Deal must speak the language of Europe’s workers, engineers, and industrial innovators. It must be anchored in the principles of strategic foresight, economic fairness, and technological excellence.

The European Parliament, together with national governments and the Commission, must drive this agenda forward, with steel as a flagship.

Towards a Common European Future

The transition to clean industry will not be easy. It will demand courage, compromise, and unprecedented cooperation. But it also offers Europe a chance to reimagine its economic model, one that respects the planet, uplifts its people, and secures its place in the world.

A European Steel Pact is not a nostalgic appeal to the past. It is a strategic blueprint for the future. It is about reindustrialising Europe in a green and fair way. It is about proving that climate policy and industrial strength can go hand in hand.

Let us not miss this moment. Let us place steel at the core of our Clean Industrial Deal, not only to decarbonise, but also to lead. Not only to compete, but to thrive. Europe’s future depends on it.