Europe’s electrical steel fix is only a brief pause

The European Union has at last moved to shield a small but strategically awkward corner of industry. On 18 September, after Germany, France and Poland asked for action, the European Commission imposed import quotas and minimum prices on grain-oriented electrical steel, with the rules taking effect on 25 September and lasting 155 calendar days. The target is cheap imports, especially from China. It is a modest intervention, but then modesty is often what remains when a policy problem has been ignored for too long.

The material in question, known as GOES, is not the sort of product that usually attracts public attention. Yet it is essential for energy-efficient transformers and large generators. Germany now has only one remaining full producer, Thyssenkrupp, and even that position has been weakened by imports sold well below European production costs. The plant in Isbergues in France was already shut down for that reason, and the Gelsenkirchen plant was taken offline for several weeks under similar pressure.

That matters because this is not merely a steel dispute. Germany’s planned expansion of transmission and distribution networks, tied to the energy transition, is expected to require 500,000 kilometres of cable by 2045, including nearly 35,000 kilometres of high-voltage lines, and 500,000 transformers, among them more than 5,000 large transformers. Delivery times for those large units have already stretched from an average of ten months in 2020 to between two and four years. The grid is being built while the industrial base that supports it is shrinking.

Sir Richard Dearlove, the former head of MI6, has recently argued that the noise around energy markets distracts from the geopolitical risks hanging over energy infrastructure. His point is not that every weakness is engineered from abroad. It is that weak systems invite pressure, and that countries which lose industrial capacity also lose the ability to reproduce the equipment they need. Once that happens, spare parts, replacement gear and basic resilience become harder to secure.

The EU’s response is limited, and that limitation says a great deal. The current measures expire after 155 days. A longer-term arrangement would need a qualified majority of member states, many of which do not make this specialist steel and therefore benefit from the cheaper imports. So the countries that still have production must wait for the consent of those that do not. Strategic autonomy sounds far more imposing than it behaves in practice.

The deeper problem is familiar by now. Deindustrialisation is not just a matter of jobs leaving the factory floor; it is a matter of leverage slipping away. If Europe wants secure energy infrastructure, it will need more than temporary quotas and minimum prices. It will need a production base strong enough to stop treating dependence as a policy choice.

Written by Freya Stensrud freya.stensrud@alpineweekly.com