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The European steel industry recommendations on Industrial Demand Side Response
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Executive summary
➢ As decentralised energy systems will be dominated by variable and intermittent weather-dependent electricity generation, the provision of flexibility services under all relevant time-frames will need to be scaled massively to maintain an efficient functioning and security of supply.
➢ The European steel industry is already a key provider of flexibility in the EU electricity system.
➢ The need to realise in record-time new fossil-free generation capacity and expand electricity grids, key enablers of the decarbonisation of industries, shall nonetheless remain the priority.
➢ The sector could contribute further provided that the structural challenges around the energy transition, namely the speedy roll-out of new generation capacity, the expansion of grids, and the restoration of cost-affordable electricity prices, are addressed first and as a priority.
➢ The assessments of flexibility needs, technology potentials, and the related target-setting process shall preserve and respect the economic, organisational, and technical limits of industrial production processes such as steel.
➢ European and national initiatives on demand-side response should create the optimal conditions for industrial consumers to provide flexibility while retaining international competitiveness and limiting overall electricity system costs:
➢ The steel sector overall welcomes the increased focus and planned actions to unlock the full potential of the wider range of DSR technologies in the pursuit of increased system resilience and more efficient use of electricity grids.
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Brussels, 29 October 2024 – The European steel market faces an increasingly challenging outlook, driven by a combination of low steel demand, a downturn in steel-using sectors, and persistently high import shares. These factors, combined with a weak overall economic forecast, rising geopolitical tensions, and higher energy costs for the EU compared to other major economic regions, are further deepening the downward trend observed in recent quarters. According to EUROFER’s latest Economic and Steel Market Outlook, apparent steel consumption will not recover in 2024 as previously projected (+1.4%) but is instead expected to experience another recession (-1.8%), although milder than in 2023 (-6%). Similarly, the outlook for steel-using sectors’ output has worsened for 2024 (-2.7%, down from -1.6%). Recovery projections for 2025 are also more modest for both apparent consumption (+3.8%) and steel-using sectors’ output (+1.6%). Steel imports share rose to 28% in the second quarter of 2024.
Fourth quarter 2024 report. Data up to, and including, second quarter 2024
Brussels, 22 October 2024 – The steel crisis will be at the centre of the European Parliament (EP) Plenary sitting tomorrow morning in Strasbourg. Members of the European Parliament (MEPs) will debate how to tackle the dire situation facing the European steel industry and its workers, caused by global steel overcapacity, unfair trade, low demand in the manufacturing industry and high energy prices in the EU. This public discussion raises high expectations for a fit-for-purpose EU Steel Action Plan to be implemented swiftly to save the sector as the basis for EU manufacturing, underscores the European Steel Association.