A proposal from the European Commission on protective measures for the EU steel sector could jeopardise the region’s efforts to meet its 2030 renewable energy target.
That’s according to trade body WindEurope, which has made the comment in response to the proposal suggesting steel imports would be restricted from third countries to the EU until July 2021.
It warns the measures being discussed by the EU could increase the cost of steel used in offshore wind and therefore make renewable targets harder to achieve.
The Commission initially applied a set of safeguard measures in July 2018 to protect the European steel industry from trade deflection from the US in response to similar restrictions imposed by President Donald Trump.
The provisional measures were designed as a global tariff-rate quota, which meant 25% duties on steel imports apply once the EU exceeds predefined steel import volumes.
WindEurope says the revised safeguard measures will mean import volumes per steel category will increase by just 5% every year until 2021.
The import volumes will be set based on a mixed system of global and country-specific tariff-rate quotas.
CEO Giles Dickinson adds: “It’s good the Commission have opted for an annual increase in steel import volumes. But 5% is very low: we expect demand for steel in offshore wind alone to rise by 36% in 2019. It’s in nobody’s interest for access to steel volumes to turn into a scramble for raw materials with other sectors like we’re all chasing seats in musical chairs. Not least when our own sector has binding EU renewables targets it’s got to help meet.
“If we have to pay tariffs on our steel imports, the price of wind energy will increase. Steel makes up over half the material used in wind turbine production. Tariffs could add 18% to the price of turbines. This would offset the cost reductions we’ve achieved in recent years and mean achieving the EU’s 32% renewable energy target for 2030 will cost society more than is necessary. And it would put European turbine manufacturers at a disadvantage to Chinese competitors that source domestic steel at much lower prices.”
The EU is due to vote on the proposals this Friday.