Industry needs more tariff-free steel, WindEurope claims

Annual increases of the amount of imported steel exempted from European Union (EU) tariffs will push up the price of wind and put 2030 renewable energy targets at risk, trade association WindEurope has claimed.

EU steel tariffs could add 18% to the price of turbines, WindEurope claimed (pic: European Commission)
EU steel tariffs could add 18% to the price of turbines, WindEurope claimed (pic: European Commission)

Member states supported the European Commission’s proposal to increase import volumes per steel category 5% every year until 2021 to protect EU producers.

Once the quota — set at the average level of imports over the past three years, plus 5% — is filled, a 25% tariff is applied to further imports.

The Commission will now finalise the procedure so that definitive measures can come into place from the beginning of February 2019, it stated.

WindEurope CEO Giles Dickson welcomed the Commission’s desire for annual increases in the steel import volumes, but argued 5% was too low.

The organisation expects demand for steel in offshore wind alone to rise by 36% in 2019 — meaning demand could outstrip the availability of tariff-free imported steel.

"It’s in nobody’s interest for access to steel volumes to turn into a scramble for raw materials with other sectors like we’re all chasing seats in musical chairs — not least when our own sector has binding EU renewables targets it’s got to help meet," Dickson added. 

Dickson claimed that turbine manufacturers having to pay tariffs on imported steel would increase the price of wind energy.

"Steel makes up over half the material used in wind turbine production," he explained.

"Tariffs could add 18% to the price of turbines. This would offset the cost reductions we’ve achieved in recent years, and mean achieving the EU’s 32% renewable energy target for 2030 will cost society more than is necessary.

"It would also put European turbine manufacturers at a disadvantage to Chinese competitors that source domestic steel at much lower prices."

The European Commission first applied provisional safeguard measures in July 2018 to shield the European steel industry from deflection, following Trump administration’s tariffs.

Under a temporary agreement, an additional 25% tariff would be levied on steel — but only after the EU exceeds the average import volume over the previous three years.

The revised safeguard measures mean import volumes per steel category would increase by 5% every year until 2021.

"These measures are intended to shield European steel producers following the trade diversion of steel into the EU market from other producers around the world as a result of the unilateral US measures restricting imports of steel to the American market," according to a statement from the European Commission.

"The definitive measures aim to preserve traditional trade flows."

Steel imports to the EU increased 12% in 2018, according to the European Steel Association (Eurofer). The industry group forecasts the bloc’s steel demand to increase by 1% in 2019.

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