Ensuring the Long-term Competitiveness of Romania’s Steel Industry

In recent years, Romanian steelmakers have faced the significant challenges felt by all EU industries, grappling with rising energy costs, increased competition from non-EU producers, and fluctuating demand, all of which have put immense pressure on the industry’s operations and competitiveness, is shown in an analysis carried out by the Energy Policy Group (EPG).   Romania is one of the last remaining countries in Central and Eastern Europe (CEE) with primary steel production, and steelmaking contributes significantly to the national economy and employment.   The competitiveness of the steel industry is at risk due to high and volatile energy prices, uncertainty around future hydrogen and steel scrap availabilities, constrained capacity to secure financing, and the lack of a green steel market.   In the long-term, maintaining competitiveness necessarily implies a transition from conventional to low-carbon steelmaking, requiring affordable low-carbon energy, the transformation of production processes and substantial investments.   With significant renewable energy potential, an important automotive sector, and booming infrastructure development, Romania is well-positioned to advance a transition to competitive low-carbon steel.   However, it suffers from policy and regulatory bottlenecks, leading to underutilisation of EU funding, high energy prices, and low investment certainty due to lagging national planning for hydrogen infrastructure and supply chains for high-quality steel scrap.   In the context of major pressure to compete in a low-carbon world, as well as the policy push of the Clean Industrial Deal and forthcoming Steel and Metals Action Plan, Romania must urgently implement key concrete actions to maintain its steel industry.   These include ramping up renewable electricity deployment, developing hydrogen infrastructure, labelling steel scrap as a critical resource, proactively absorbing and efficiently disbursing EU funding, setting up novel funding and derisking instruments and leveraging private funding, and creating robust lead markets in the construction, automotive, and shipbuilding sectors.