Statement on the Revision of the Guidelines on State Aid for Rescuing and Restructuring Non-financial Undertakings in Difficult
19 August 2026 | The German Steel Association (Wirtschaftsvereinigung Stahl) welcomes the opportunity to comment on the European Commission’s draft Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty.
The proposed inclusion of the steel sector in the scope of the Guidelines does not find our support as the structural challenges the European steel industry is facing require more targeted responses: global overcapacity and import pressure should be addressed through effective trade defense measures, while public support measures should focus on decarbonisation, transformation and long-term competitiveness.
This necessary distinction has become even more important since 1 July 2026, when a dedicated EU trade instrument has come into action that addresses the negative traderelated effects of global steel overcapacity. Opening the R&R Guidelines in parallel risks preserving non-competitive capacities and creating additional distortions within the European steel market.
The German Steel Association therefore calls on the Commission to maintain the existing exclusion of the steel sector from the R&R Guidelines.
- The inclusion of the steel sector is neither necessary nor the appropriate response to global overcapacity
The Commission justifies the proposed inclusion of the steel sector by referring to changes in EU steel production, capacity, consumption and trade flows since 2014, declining EU production and capacity and the growing role of imports.
These developments do not demonstrate a need for rescue and restructuring aid. Rather, they reflect the consequences of persistent global excess capacity and increasing import pressure. Since 1 July 2026, the Union has a dedicated trade instrument specifically addressing these challenges. Regulation (EU) 2026/1384 establishes significantly reduced tariff-rate quotas and a 50 % out-of-quota tariff. It therefore targets one of the central structural challenges identified by the Commission itself in point 16 of the draft Guidelines.
Global overcapacity and import pressure should be addressed through effective trade policy, not through rescue and restructuring aid for individual steel producers. In a highly integrated European steel market, such aid could shift the burden of structural adjustment to competitors in other Member States. - State aid must support transformation and competitiveness rather than preserve non-competitive capacities
The European steel industry’s central challenges remain structural transformation, decarbonisation, high energy costs, security of raw material supply and international competitiveness.
Public support should therefore remain focused on enabling investments that establish a competitive, climate-neutral and resilient European steel industry. Existing and developing State aid frameworks for climate, energy, environmental protection, innovation and industrial transformation are more appropriate instruments for this purpose.
The proposed opening of the R&R Guidelines creates a risk of moving in the opposite direction: support may be directed towards preserving existing capacities without sufficiently distinguishing between undertakings facing temporary transformation-related financial pressure and business models that are structurally non-viable.
This is particularly relevant given the steel industry’s high transformation costs. State aid should prioritise investment, innovation and transformation rather than the preservation of economically unsustainable capacities. - Safeguarding economic security without distorting competition
We welcome the recognition in point 43(f) of economic security, resilience, critical supply chains and the preservation of important technical knowledge and expertise.
However, economic security must neither justify preserving structurally noncompetitive capacities nor should restructuring measures lead to the reduction of strategically relevant and viable European steelmaking capacity. Any
assessment should be distinguished between economically unsustainable capacity and strategic, competitive or transformable capacity that is essential for European resilience and security of supply.
Should the steel sector nevertheless be included, measures to limit distortions of competition, including possible capacity reductions, should reflect thisdistinction. - Safeguards are required if the steel sector remains within scope
Should the Commission nevertheless maintain the proposed inclusion of the steel sector, the Guidelines should ensure that:
- global overcapacity and import pressure, as well as the effects of relevant EU trade instruments, are considered when assessing the need for State intervention;
- aid does not preserve structurally non-competitive capacity or merely compensate for persistent market distortions;
- the impact on competitors and production capacity in other Member States is fully considered; and
- measures to limit distortions of competition do not undermine strategic European production capacities, resilience or economic security.
These considerations could also be reflected in the restructuring plan under Annex II, which already requires an assessment of the beneficiary’s market environment, the causes of its difficulties, alternative restructuring options and measures to limit distortions of competition.
Conclusion
The structural challenges facing the European steel industry should be addressed through effective trade defensee, competitive framework conditions – especially competitive energy cost – and targeted support for decarbonisation and industrial transformation, rather than rescue and restructuring aid.
The German Steel Association therefore calls on the Commission to maintain the exclusion of the steel sector from the scope of the Rescue and Restructuring Guidelines.
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