EU Energy & Climate Policy Update

Written by Martijn Meijer

Dear reader,

Welcome to a new edition of our monthly Energy & Climate Policy Update. Over the past month, the European Commission presented strategic plans for both automotive and steel and metals. More information on that in our Spotlight and the policy updates. In our dedicated Clean Industrial Deal section, we take a closer look at the Affordable Energy Action Plan, which was published together with the Clean Industrial Deal last month.

Europe’s bold plan for sustainable growth, the “Clean Industrial Deal”, represents a major shift for EU businesses, especially in energy-intensive sectors. Don’t miss your chance to engage with the Commission to shape this deal and influence the policy direction for the next five years.

The spotlight

Action Plan on Steel and Metals

On 19 March, the European Commission unveiled its Action Plan on Steel and Metals, a bold strategy to boost Europe’s industrial strength, keep the sector competitive, and secure its future in an era of geopolitical uncertainty.

Why is this plan important and what does it entail? Dive into this month’s Spotlight to find out!

Why is an action plan needed?

The Action Plan on Steel and Metals aims to address key challenges threatening the competitiveness, sustainability, and strategic importance of Europe’s steel and metals industries. Why does the steel and metal sector need an action plan? Let’s delve into it:

• Strategic importance: Steel and metals are essential for industries like automotive, clean tech, defence, and aerospace. With the EU’s €800 billion ReArm Europe plan to boost defence capabilities, a strong domestic metals sector is critical to maintaining strategic autonomy and reducing reliance on China and the US.
• Global competition: The EU’s share of global steel production has dropped to 7-8%, while China, India, and others have expanded with distortive subsidies. Global overcapacity (4.5x the EU’s yearly consumption) is driving down prices, making EU steel less competitive and exposing it to high imports and unfair trade practices, threatening local production and jobs.
• High energy costs: Skyrocketing energy prices are making European steel and metal production less competitive compared to other steel and metals-producing countries, mainly caused by stricter EU regulations. Electricity prices are 2-3 times higher in the EU than in the US.
• Investment challenges: The metals industry accounts for 8.1% of EU greenhouse gas emissions, making investment in clean technologies essential. To balance decarbonisation and competitiveness, the European Commission launched the Clean Industrial Deal, outlining a strategy to support industry investments.

What is in the action plan?

The EU’s action plan introduces 25 key measures across six pillars to strengthen the steel and metals industry.

Want to understand how these changes could impact your business? Contact Publyon for an expert analysis tailored to your needs. To give you a taste, here are some key highlights!

• Through the Action Plan on Affordable Energy (see our “Clean Industrial Deal” section below) the EU supports solutions like Power Purchase Agreements (PPAs) – long-term contracts that provide financial stability for renewable energy projects, minimise market risks, and attract investment in clean energy.
• As direct electrification is not always feasible, hydrogen plays a crucial role in decarbonizing the steel and metals industries. The Commission will soon adopt a delegated act on low-carbon hydrogen and, by Q3 2025, launch the third Hydrogen Bank call to support production and improve industrial access, including for steel.
• By Q2 2025, the Commission will release a communication analysing options to address carbon leakage for Carbon Border Adjustment Mechanism (CBAM) goods exported from the EU to third countries.
• In Q4 2025, the Commission will propose measures to ease grid access for electrification projects in energy-intensive industries.
• The Commission will evaluate the implementation of a “melted and poured” rule to trace the country where metal goods were originally melted and cast.
• By Q4 2026, the Commission will prepare to introduce recycled content obligations for aluminium in relevant construction products and strengthen the market for secondary raw materials in the EU under the Circular Economy Act.
• In Q4 2025, the Commission will propose resilience and sustainability criteria under the Industrial Decarbonisation Accelerator Act to boost EU-made clean production.

Next steps

In the coming months, the European Commission will unveil proposals to protect the European steel and metals industry. To ensure your organisation’s needs are considered, it’s crucial to already provide input now, towards the European Commission but also toward other institutional and non-institutional stakeholders.

Would you like to explore how the measures in the Steel and Metals Action Plan might impact your business? We can help you connect with key stakeholders in Brussels. Contact us now via eu@publyon.com.

Impact analysis for your business

Our free policy updates keep you informed, but is that enough? With our tailored EU Energy & Climate Policy Update you’ll receive: 

• Custom insights on how upcoming policy changes might impact your business;
• Strategic advice from your dedicated policy consultant on how to turn challenges into opportunities;
• Early warnings about key legislative developments.

Schedule a free consultation

Policy updates

Strategic dialogue for the Chemical industry launched

On 25 March, Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, announced during the Competitiveness Council that he will launch a strategic dialogue for the Chemical industry. A similar construct has previously been used for the automotive, steel and agricultural sector. Before the meeting, eight Member States, led by France, proposed the creation of a Strategic Chemicals Act to protect the European chemical industry. Such an act would designate a list of chemicals as critically important to European interests. During the meeting, Séjourné neither rejected nor accepted the idea.

New German coalition to stick to coal exit plans

On 24 March, a paper was leaked about plans from the likely new German coalition – consisting of the Chirstian Democrats and the Social Democrats – to phase out coal power plants by 2038 at the latest. The former coalition of the Social Democrats, the Greens and the Free Democrats had planned to complete the phaseout by 2030, but the new plans have moved the date back. The final date will be dependent on the speed of which gas-fired power plants can be added to the grid as replacement. Meanwhile, the decommissioning of nuclear power plants would be halted, whilst inspection authorities would look at the possibility of recommissioning them.  

Commission pushes back proposal for 2040 climate target

On 21 March, the Commission decided to delay a new EU climate target for 2040. Last month the Commission had stated that a 2040 target to cut emissions by 90 percent, to keep the Member States on track between 2030 and 2050, would be published in the first quarter of this year. It is not yet known when the proposal will be published, with postponement likely being due to expected opposition from some Member States and groups in the European Parliament.

White Paper on the Future of EU Defence published

On 19 March, the European Commission published a white paper on the future of European Defence. The document follows up on the ReArm Europe Plan / Readiness 2030, which should enable €800 billion in investments for the sector. The white paper lays out the priority areas for defence in Europe, with a large segment devoted to infrastructure and military mobility. Along with other initiatives, the Commission announced the selection of 500 infrastructure hot spots which they want to upgrade and will sharpen the rules on the foreign ownership of critical infrastructure.

Member States discuss European energy

On 17 March, the European Energy Ministers met in Brussels for the Energy Council. The main topics of the meeting were the Action Plan for Affordable Energy (APAE) and Europe’s energy security. The ministers responded positively APAE, mostly focussing their discussion on the medium- to long-term measures presented. They were more critical on the Commission’s proposal to give recommendations on tariffs and taxation, noting these are national competencies. Afterwards, they discussed the EU regulations on the security of gas supply and electricity risk preparedness, which they believe need to be adapted to the new economic and political context.

Commission publishes Automotive Industrial Action Plan

On 5 March, the European Commission published an Industrial Action Plan for the European Automotive Sector. The Commission seeks to support the struggling sector through a multitude of measures and drafted the plan based on strategic dialogues with stakeholders. The Commission seeks to give the sector more breathing space by changing the measuring of emission limits for producers: from covering one year (which would have started in 2025) to the average of the coming three years, which gives producers more time to meet the standards. The plan reserves a further €570 million in funding for alternative fuels infrastructure, including charging and hydrogen, in 2025 and 2026.  

Clean Industrial Deal

The Action plan for Affordable Energy (APAE)

As part of the Clean Industrial Deal (CID), the European Commission on 26 February presented an Action Plan for Affordable Energy (APAE). The plan aims to unlock the full potential of the Energy Union to ensure affordable, efficient, and clean energy for all Europeans. It includes various actions across four key pillars, focusing on tackling energy poverty, lowering costs, and advancing the EU’s energy transition.

Pillar one – Lowering energy costs

The plan takes into account three components to reduce energy costs: network charges, taxes, and supply costs. Additionally, as natural gas plays a key role in the electricity mix, ensuring efficient gas markets that provide market-driven prices will help lower both gas and electricity costs. Furthermore, improving energy efficiency and promoting savings will decrease the overall amount of electricity consumers need to purchase.

• To make electricity bills more affordable, the European Commission will propose tariff methodologies that encourage flexibility and electrification (Q2 2025), and support the revision of the Energy Taxation Directive (ETD) to align energy taxation with EU climate goals (Q4 2025).
• To bring down the cost of electricity supply the Commission will decouple retail electricity bills from gas prices through the promotion of Power Purchase Agreements (PPAs), accelerate permitting procedures for clean power and energy infrastructure, propose a European Grid Package (Q1 2026) to accelerate the expansion, modernisation and digitalisation of grids and increase system flexibility by deploying storage and demand response.
• To ensure well-functioning gas markets, the Commission will conduct a thorough analysis through the Gas Market Task Force and work to expand and diversify the pool of reliable LNG supplier partners.
• To enhance energy efficiency the Commission will improve access to capital and provide financial incentives to support market actors through the European Energy Efficiency Financing Coalition and will update EU energy labelling and eco-design rules

Pillar two – Completing the Energy Union

This includes boosting investments in research and innovation for clean energy solutions and enhancing cross-border grid interconnection.

• To complete the Energy Union, the Commission will launch an Energy Union Task Force, publish a White Paper on deeper electricity market integration, revise the Governance Regulation of the Energy Union, present a Clean Energy Investment Strategy, an updated Nuclear Illustrative Programme (PINC), and a Fusion Strategy, and put forward an Electrification Action Plan, a Strategic Roadmap for Digitalisation and AI for the Energy Sector, and a Heating & Cooling Strategy (2025-2027).

Pillar three – attracting investment and ensure delivery

Creating a transparent, competitive energy market to protect consumers and reduce volatility in prices.

• To ensure affordable energy for Europe’s industry and citizens the Commission aims to create a Tripartite Contract for Affordable Energy (2025), uniting the public sector, clean energy developers, and energy-consuming industries. This contract will provide long-term price and supply certainty for both producers and energy-intensive industries, such as steel, promoting investment in clean energy and electrification. By establishing stable regulatory frameworks and predictable clean energy auctions, the initiative will reduce risks, lower costs, and foster long-term economic growth. The plan, including sector-specific contracts for industries like hydrogen and offshore wind, is set for implementation by 2025.

Pillar four – energy crisis preparedness

Increasing resilience by providing tools to Member States for effective action while strengthening the security of supply framework.

• To ensure security of supply for price stability the Commission will propose a legislative proposal for a revision of the EU energy security regulatory framework (Q1/Q2 2026).
• To prevent price spikes during energy crises, the Commission will guide Member States in developing and implementing schemes to reduce peak demand by offering remuneration incentives for consumers and support close cooperation between transmission system operators (TSOs) and national regulatory authorities to increase available cross-border interconnection capacities in certain situations.

What does this mean for your business?

For businesses in the EU, this plan aims to provide greater stability in energy prices and encourage investment in clean energy solutions. The Commission aims to help (energy-intensive) industries and enterprises by ensuring more predictable energy costs and reliable supply. The plan also includes measures to promote energy savings, enhance market integration, and drive innovation, all of which can lower operational costs and improve competitiveness.

Would you like to explore how the specific actions outlined in the plan might impact your business? Contact us now via eu@publyon.com

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