Von der Leyen puts energy costs and competitiveness at centre of EU agenda

European Commission President Ursula von der Leyen has put high energy costs, international competition and industrial investment at the centre of her 2026 State of the Union address, drawing a positive but cautious response from Europe’s steel industry.

Von der Leyen said Europe could not remain an industrial powerhouse while energy prices were “structurally too high”. She called for more domestic clean energy, faster grid connections and additional storage capacity. The Commission aims to double electricity’s share of European energy consumption by 2040, potentially cutting the EU’s fossil-fuel import bill by €260 billion annually.

Trade conditions were another major theme. Von der Leyen said the EU’s trade deficit with China had reached around €1 billion per day, warning of growing pressure on European manufacturing. She pledged to use available EU instruments to rebalance the trade relationship.

EUROFER calls for implementation

The European Steel Association EUROFER welcomed the focus on competitiveness, affordable energy and a level playing field, but said the priority must now be implementation. It called for lower electricity prices, affordable hydrogen and lead markets for low-carbon steel produced in Europe.

“European steelmakers remain committed to climate neutrality: the technology is moving forward, but the business case must move forward with it,” EUROFER Director General Axel Eggert said.

The association also highlighted the future of the EU Emissions Trading System (ETS). EUROFER argues that the phase-out of free allowances should reflect whether the Carbon Border Adjustment Mechanism (CBAM) is effectively preventing carbon leakage and whether steelmakers have access to competitively priced energy and decarbonisation technologies.

It also warned that carbon leakage could shift downstream as European manufacturers compete with imported steel-intensive finished products facing lower carbon costs. EUROFER therefore supports protection for relevant downstream products and Made-in-Europe criteria to stimulate demand for low-carbon European steel.

Von der Leyen meanwhile reaffirmed that the EU would maintain its climate targets, while acknowledging that the transition would require adjustments along the way.

For European steelmakers, the central issue is whether these climate ambitions can be matched by energy, trade and market conditions that make investment in low-carbon steel production commercially viable.

Source and Photo: European Commission, Eurofer