Clean steel made in Europe, in Poland too?

The discourse surrounding the transformation of energy-intensive industries, particularly the steel sector, is intensifying in Europe. This is driven by stringent EU regulations and ambitious CO2 reduction targets, alongside a diminishing allocation of free CO2 allowances starting in 2026. Consequently, the steel industry will face higher costs for emissions unless substantial investments in new technologies are made, leading to increased steel production costs. Additionally, there is growing demand from customers in sectors such as automotive, construction, renewable energy, and defence for steel with the lowest possible carbon footprint.

In leading Western European economies, the transformation of the steel sector towards a zero-carbon footprint is already well underway. Germany, for instance, is constructing a green steel plant in Duisburg at a cost of nearly EUR 2 billion, which will eventually be powered by hydrogen through the direct reduction of iron (DRI) technology. This approach significantly reduces direct process emissions from production. Similar steel plants, co-financed by national and EU funds, including the Innovation Fund, are under construction in Sweden, Spain, and France.

Conversely, the transformation of the steel sector in Poland and other Central and Eastern European (CEE) countries is at an incipient stage. There are no definitive plans for the future of existing steel plants that rely on oxyfuel furnace technology powered by fossil fuels, primarily coking coal, which emit substantial CO2 levels. Additionally, there are no plans for new investments in the sector beyond replacements. In contrast, the cement sector is actively investing in carbon capture, utilization, and storage (CCUS) technologies.

This situation may undermine the competitiveness of the steel industry in Poland and Central Europe. Steel mills that continue to use carbon-intensive technologies face a tangible risk of closure, potentially reducing European production capacity. Without new investments in clean, decarbonized, or green steel, Poland and Europe could face a decline in trade balance and increased imports of raw materials from outside the EU. This scenario would negatively impact the competitiveness of steel-consuming industries and, through extended supply chains, affect the entire EU industry.

Therefore, it is imperative to engage in discussions about the competitiveness of the steel sector in Europe, with particular emphasis on the perspective of Central and Eastern Europe.

Agenda:

17:00-17:30 Welcome drinks and registration

17:30-17:40 Welcome words by Arkadiusz Pluciński, the Deputy Permanent Representative of the Republic of Poland to the EU

17:40-18:00 Opening presentation summarising new Instrat’s study results - Michał Hetmański, CEO of Instrat, Visiting Senior Fellow at London School of Economics

• costs of producing decarbonised steel made in Poland
• recommendations for the public and private sector

18:00-19:00 Panel discussion

• Michał Hetmański, Instrat (moderator)
• Axel Eggert, Director General of EUROFER
• Andreas Graf, Programme Lead EU Climate & Energy Policy, Agora Energiewende
• Kerstin Jorna, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
• Judith Kirton-Darling, Deputy General Secretary, industriAll Europe

19:00-19:30 Q&A session

19:30-21:00 Reception