On 24th September Instrat organised a study launch and a debate: Clean steel made in Europe, in Poland too? How to remain globally competitive and include the CEE perspective?, which took place at the premises of the Permanent Representation of Poland to the EU. We came back to Brussels with a new area of focus – decarbonisation of industry, especially the steel sector in Poland. Think-tank’s CEO & Co-founder Michał Hetmański pre-launched a new steel cost modelling and presented a set of recommendations for the decision-makers which was followed up by an insightful debate including representatives of industriAll Europe, European Steel Association (EUROFER), Agora Energiewende and European Commission’s DG GROW.
Study pre-launch
In Michał Hetmański’s presentation, he highlighted that Poland’s steel production is currently lagging behind domestic demand, while alternatives to coal-based steel production, such as low- or zero-emission technologies, are gaining momentum across Europe, though unevenly. Instrat’s analysis outlined several options for Poland to source cleaner steel, including the use of Direct Reduced Iron (DRI) combined with Electric Arc Furnaces (EAF) powered by hydrogen, traditional Blast Furnace – Basic Oxygen Furnace (BF-BOF) with potential carbon capture, further use of scrap fueled Electric Arc Furnace (EAF) or importing steel from emerging clean technology hubs.
He stressed the urgent need for decision-makers to act swiftly, emphasizing that Poland’s government must facilitate private-sector investments in at least one of these technological solutions. Supportive infrastructure, regulation, and financing are essential, particularly in carbon capture (if decided for) and hydrogen technology. Furthermore, Hetmański emphasized the importance of reducing electricity prices for industrial consumers, as electricity is a key factor in all clean steel technologies. Finally, he urged policymakers to ensure that the transition leaves no one behind.
Different viewpoints from stakeholders
The debate that followed included guests representing different standpoints: workers, business, legislators and experts. Kerstin Jorna, Director-General of DG GROW represented the European Commission, Axel Eggert the European Steel Association (EUROFER), Judith Kirton-Darling the trade union hub industriAll Europe, Andreas Graf German think tank Agora Energiewende and our own Michał Hetmański performed the role of the moderator.
The transformation of energy-intensive industries, especially the steel sector, is gaining momentum in Europe due to stricter EU regulations and upcoming reductions in allocation of free CO2 allowances by 2026, which will increase production costs unless investments in new technologies are made. While Western European countries like Germany, Sweden, and France are progressing with green steel plants powered by hydrogen and often supported by EU funds, the steel sector in Poland and other Central and Eastern European nations remains underdeveloped, with no clear plans for decarbonisation.
This delay risks undermining the region’s competitiveness, as reliance on carbon-intensive technologies may lead to plant closures, reduced production capacity, unjust transition and loss of good industrial jobs and increased imports, negatively affecting steel-consuming industries across the EU. During the debate, speakers agreed that urgent discussions on the steel sector’s future, especially in Central and Eastern Europe, are crucial to avoid these risks.
What next?
Surprisingly, Brussels-based stakeholders are more interested in discussing the decarbonisation of the Polish steel sector than those based in Warsaw are – despite many invitations, no representative of all ministries in charge of steel sector in Poland came to our event. Nevertheless, we stressed during the event that the time to make decisions about the future of those projects is exceptionally urgent. Hopefully, the number of recommendations and findings that are published now by several think tanks will help amount to a critical mass that will influence the thinking of the Polish decision-makers.
Full Instrat’s modelling on the costs of green and decarbonised steel production in Poland are going to be published soon as our Instrat Policy Paper is launched later in October.
