The Future of Steel in Europe

THE HAGUE, 3 April 2025. The European Investment Bank (EIB) committed a record €51 billion to support the green transition and another €31 billion to back energy infrastructure for this. This reflects the European Union’s strong commitment to the green transition, aiming to reduce carbon emissions and transform industries to be more sustainable. However, the manufacturing sector, especially steel production, faces complex challenges beyond decarbonisation. With tariffs, rising energy costs, and the issue of Chinese overcapacity flooding the global market, how can the EU ensure domestic production remains competitive? Currently, imported steel holds 27% of the European market share. Finding a balance between sustainability and industrial resilience is crucial for the future of European steel.

What Is Green Steel?

Green steel refers to steel produced using processes that significantly reduce carbon emissions compared to traditional blast furnace methods. This often involves hydrogen-based direct reduced iron (DRI), electric arc furnaces (EAF) powered by renewable energy, and carbon capture technologies. The goal is to phase out coal-based production methods, which are a major source of CO₂ emissions, and replace them with cleaner alternatives. Currently, steel production accounts for 7-9% of global carbon emissions. While promising, these technologies require substantial investment and infrastructure changes across the European steel sector.

Challenges Facing the EU Steel Industry

Despite the push toward green steel, European manufacturers face several obstacles:

High production costs: Green steel technologies require massive investments in new infrastructure, including hydrogen electrolysis plants and renewable energy sources.
Energy dependency: Europe’s reliance on imported energy, especially natural gas, makes it difficult to control manufacturing costs.
Chinese overcapacity: China produces more steel than it consumes, leading to a flood of low-cost exports that undercut European manufacturers.
Tariffs and trade policies: While tariffs can protect steelmakers, they also create tensions in global trade, impacting both exports and imports. In addition, the EU faces a 25% tariff on imports of steel and aluminium from the US.
Regulatory uncertainty: The transition to a green economy comes with evolving policies and requirements, making long-term planning difficult for manufacturers.

Overcoming the Challenges

To navigate these challenges and strengthen the European steel industry, the EU and manufacturers can focus on several strategies:

Investment in green steel infrastructure: Governments and private investors must accelerate funding for hydrogen-based steel production and renewable energy integration.
Stronger trade policies: While tariffs help curb unfair competition, a more balanced approach, such as carbon border adjustment mechanisms (CBAM), can ensure imported steel meets the same environmental standards.
Regional supply chain development: Encouraging local sourcing of raw materials and energy can reduce dependency on imports and stabilise production costs.
Public-private partnerships: Collaboration between governments, research institutions, and steel manufacturers can accelerate innovation and create sustainable solutions.
Technology-driven efficiency: Automation, AI, and advanced quality control systems can enhance production efficiency and reduce material waste.

RESONIKS' Role in the Green Transition

As the steel industry makes the green transition, one key concern is quality. With evolving materials and new production methods, manufacturers need reliable, automated testing solutions to ensure that every component meets strict safety and durability standards.

At RESONIKS, we provide an advanced AI-powered acoustic resonance testing system that offers 100% quality control at scale. Unlike traditional spot-check methods, our solution allows manufacturers to test every single steel part, reducing defects and minimising waste.

This is particularly valuable in an industry where consistency and material integrity are critical. By integrating RESONIKS’ technology, steel manufacturers can enhance efficiency, cut costs, and meet sustainability goals with confidence.

The future of European steel depends on innovation, adaptability, and sustainability, and automated quality control will be a crucial part of this transformation.