Quotas and tariffs on imported steel are “putting the economic sustainability of the European wind industry at risk”, claimed the sector’s main industry advocacy group in the EU after Brussels decided to extend ‘safeguard measures’ for another three years.
Amid soaring commodity prices for the key wind turbine raw material, WindEurope said continuing European Commission measures to impose tariffs on imports above certain quotas “raise serious questions about its strategic commitment to the economic sustainability of steel users such as the European wind industry”.
The safeguard measures, designed to protect EU steelmakers, were first imposed in 2018 for three years. The EU has just decided to extend them for the same period again, rather than one as expected.
WindEurope policy chief Pierre Tardieu said: “Steel prices have increased dramatically over the past year. In some cases they have doubled. Steel is the single most important raw material for the European wind industry.
“Higher steel prices increase the costs of making towers, gearboxes, nacelles, transformers, and offshore foundations. Last week’s decision to extend steel safeguard measures is unhelpful for a rapid and cost-effective energy transition to renewables.”
Steel and other commodity costs have shot to the top of the agenda for the wind supply chain over the last year, as rebounding demand and constraints on supply pushed prices up dramatically, with Europe-based sector giants such as Vestas warning of the impact on the sector.
WindEurope claimed that in the medium term the measures will threaten ongoing reduction of renewable power costs – echoing a similar warning from research group BloombergNEF.
WindEurope added: “In the short-term component and wind turbine manufacturers will have to absorb these additional costs. Cumbersome national permitting processes mean there is a shortage of projects for wind industry manufacturers. This is putting pressure on margins as seen in the financial reports of the publicly listed wind turbine manufacturers.
“The economic sustainability of the European wind industry is at risk. Higher costs mean less capital available to invest in state-of-the-art manufacturing and research & development. Under-investment in these areas could cause the European industry to lose the global race for technology leadership in wind energy.”
