The challenges of the green steel transition in the EU and Italy

The main hurdles hindering the green transition of the EU's steel sector are the low profitability of steel businesses, amid oversupply, high energy costs, a lack of demand for low-carbon products, and a potential scrap metal shortage driven by rising demand. While the European Commission has already proposed solutions for some of these challenges, Italy finds itself in one of the most vulnerable positions within the EU steel market. The country has the highest electricity prices among member states and is a net importer of ferrous scrap. These structural weaknesses must be addressed urgently. Otherwise, the industry faces a significant risk of steel production leaking to other countries, not only outside the EU but also within it, in the coming years. A successful green transition also requires public co-funding of projects. It is, therefore, crucial for Italy to actively engage in and support domestic initiatives to de-risk investments and bolster investor confidence and at the same time constantly invest in new technologies to improve production efficiency and reduce costs.