EU parliament backs steel industry revival plan

Reuters News
Posted: Feb 04, 2014 11:29 AM

LONDON (Reuters) - The European Parliament on Tuesday passed a resolution backing a plan to revive the bloc's steel industry, calling on the European Commission and member states to adopt "economically feasible" climate and energy targets.

The resolution comes just two weeks after the Commission scaled down its 2030 climate and energy targets and underlines a new sense of pragmatism in Brussels at a when European growth is slow.

In a move unlikely to be popular with the green lobby, the resolution said the most energy efficient steel plants in Europe should not have to bear any additional costs resulting from EU climate policies.

It was not immediately clear how the resolution will tally with attempts by the Commission to prop up the EU carbon prices by delaying the sale of, or backloading, carbon permits - a major additional cost for industries like steel.

"We welcome the strong message that today has been sent by the European Parliament (who) recognize that there needs to be a real balance between climate policy and industrial competitiveness," said Eurofer director general Gordon Moffat.

The Commission launched the so-called "steel action plan" in June last year in a bid to stem a decline in Europe's steel industry, hit by a roughly 30 percent drop in demand since 2008 that has led to plant closures.

EU industrial output fell to around 15 percent of GDP last year, well short of an informal goal of 20 percent by 2020, set by the Commission. The United States, by contrast, is reindustrializing with the help of cheap energy thanks to the shale gas boom.

Gas prices in Europe are around three times higher than those in the United States, prompting the IMF to warn that energy intensive industries like cement and steel could relocate if action is not taken.

The IMF estimates these industries employ over 30 million people. Eurofer estimates the European steel industry, which employs millions of people directly and indirectly, has suffered a loss of about 40,000 jobs in recent years.

(Reporting by Maytaal Angel, editing by David Evans)