The Spanish government promised to support the steel industry in the event of energy crisis

The government of Spain has given guarantees to the domestic steel industry that in case of an energy crisis it will provide the industry with all necessary energy resources.

As Eurometal reports, this became known after the meeting between steelmakers, industry associations and trade unions with the Minister of Industry, Commerce and Tourism of Spain Reyes Maroto.

According to her, energy prices affect the development of all industries, especially the steel industry.

“The government is working on a contingency plan that should be announced before the end of September, and with which we intend to achieve a European response in accordance with the needs of large energy consumers, such as the steel industry. Last Friday, there was a unanimous agreement in the European Energy Council to enable intervention mechanisms in the wholesale electricity market,” said Reyes Maroto.

In recent months, the Spanish government has allocated more than €850 million to support local gas and electricity-intensive industries to overcome the crisis caused by rising energy prices.

Thus, the Spanish authorities have approved measures aimed at supporting local steelmakers, including:

• lowering energy taxes and increasing direct aid;
• increasing compensation for carbon emissions to €244 million.

In May, Spain and Portugal reached an agreement with the European Commission to establish a temporary mechanism, the so-called Iberian mechanism, recognizing the countries as an energy island. The scheme has allowed the implementation of temporary and exceptional measures to reduce electricity prices for end consumers and business.

Since the start of the Iberian mechanism, Spain has saved €2 billion on electricity bills.

Earlier, GMK Center reported, that European steelmakers are massively reducing or stopping production against the background of rising electricity tariffs. At the same time, the European market is filled with imported steel products, which attract consumers by lower prices than local ones. Countries that supply cheap steel to the EU market do not pay emissions taxes and receive cheaper electricity than European producers. Because of this, the demand for European rolled steel fell, and production costs rose sharply.

The leading steel producer ArcelorMittal has temporarily stopped or announced the stoppage of about 7 million tons of the corporation’s annual capacity across Europe. Among them is the Spanish rolling mill Acería Compacta de Bizkaia (ACB). The company decided not resume work after summer maintenance.

From September 6, 2022, the Spanish ferroalloy producer Ferroatlántica also stopped two operating furnaces at the plant in Bou de Guarniso. The plant’s units are stopped for an indefinite period of time – possibly until the price per megawatt of electricity is controlled.