Posted on 18 Nov 2025
Europe should redraw its steelmaking map based on today’s competitive conditions, but choosing where to build new plants will be a difficult decision with political and social repercussions, said panellists at Kallanish Green Steel Strategies in Brussels last week.
“We should not repeat history,” Primetals Technologies vice president converter steelmaking Gerald Wimmer said, referring to where new steel plants should be built. “We should start something new.” Facilities should be placed close to the coast, with good inbound and outbound logistics. “While from the logistics point of view, energy will still seem to be the easiest one, because a cable and the hydrogen pipeline is easier to be routed than a harbour and the ship,” he added.
Land constraints will be a key driver of decoupling ironmaking from steelmaking, which has historically been done captively in Europe. “I think steelmakers that are making the transition are going to have new headaches. Investing into an EAF is one, managing future scrap [supply] is another one. Why would you absolutely want to have your own direct reduction, and all the electricity and hydrogen headaches that come with it?” asked GravitHy commercial director Anne Cécile Marie.
Energy will nevertheless play a key role in investment location, with electricity prices diverging across Europe, and the Nordics, France and Iberian Peninsula being singled out as the most competitive locations.
However, these investments will have profound implications. "Do we [Europe] dare to really pick our winners [which countries to invest in new steel capacity]? It's a big elephant in the room, effectively, because there's obviously lots of things at stake ... It's jobs, it's security of supply, it's all these things combined, right? And as a local politician, even, it's a very difficult thing to do,” said McKinsey & Company engagement manager Michiel Nivard.
The EU’s diverse political and social landscape makes the job harder. “There's a very difficult discussion and choice to be made by, you know, maybe here in Brussels, elsewhere, different shareholder meetings, and that is a very difficult coordination problem,” he continued. The same decision in jurisdictions other than the EU is likely to be a more straightforward one, he added.
Industry will need smart energy investments to compete. “We already see now that the cheapest new kilowatt hours are wind and solar, but value as such belongs to those who can balance them,” noted Ramboll market director green energy transition Anna Pekala. “So it's about the combination and being able to develop a balancing portfolio with having, let's say, solar or onshore wind, combined with batteries and flexible nodes and also some other firm capacity, like hydro gas, nuclear as well.”
“So, making renewables together with the storage options feasible is probably the biggest challenge … Something like a flexible gas peaker, I mean, it's not a dirty word, right?” asked Nivard. “We can really just use those things as well to really kind of, at least bridge this whole transition phase into kind of a healthy and sustainable electricity grid.”
Source:Kallanish
