Navigating 2025: Achieving Net-Zero with Green Steel, Offshore Hydrogen and Circular Solutions
EPICO KlimaInnovation is a non-profit and independent energy and climate policy think tank providing a platform and network for policy development. In our Monthly Policy Update, we dive into the latest and most relevant developments in energy and climate policy and share the outcomes of our events and publications.
Welcome to our first newsletter of the year!
2025 promises already profound changes – from Donald Trump’s return to the White House, to elections in Germany, political instability in France, and the eagerly anticipated unveiling of the EU Commission's Clean Industrial Deal, the road towards a more sustainable and competitive reality is foggier than ever.
Nonetheless, our team at EPICO remains committed to our mission of achieving Net-Zero while supporting market-driven innovation. For this reason, we are starting the year busier than ever – from attending the upcoming German Green Week, to releasing a paper on the German Carbon Market Strategy and supply chain legislation, and organising our first panel discussion of 2025 (more on that below).
But before we dive in, let’s revisit the milestones of late 2024 that set the tone for the year ahead.
New Policy Report: Ironing out the Transformation of EU Steelmaking: Actionable Pathways for Climate Neutrality
The European steel industry stands at a critical crossroads, balancing the urgent need to decarbonise with the pressure to remain competitive amid rising energy costs and stalled industrial transformation. German Chancellor Olaf Scholz’s proposal for a European Steel Summit highlights the need for coordinated action, as green steel projects face delays due to hydrogen’s high costs, limited infrastructure, and weak demand signals. Meanwhile, the European Commission’s Clean Industrial Deal and Steel and Metals Action Plan aim to provide a clear framework to drive decarbonization while safeguarding competitiveness. However, hydrogen’s economic unviability, infrastructure gaps, and policy inefficiencies continue to hinder progress. Addressing these challenges and defining industrial resilience will be key to unlocking a sustainable and competitive future for both ore-based and scrap-based steelmaking in Europe.
Against this backdrop, EPICO’s new Policy Report "Ironing Out the Transformation of EU Steelmaking: Actionable Pathways for Climate Neutrality," addresses these pressing challenges with concrete recommendations for policymakers and industry leaders alike.
EPICO’s report offers a blueprint for creating a financially viable, socially equitable, and environmentally sustainable roadmap for Europe's steel industry.
It focuses on five key pillars:
- Ensuring access to affordable, low-carbon electricity
- Accelerating hydrogen adoption for the ironmaking process
- Enhancing steel circularity: reduce, reuse, recycle
- Developing lead markets for low-emission steel through public procurement and standardisation
- Engaging with the global dimensions of steel decarbonisation
EPICO conducted two stakeholder workshops in Brussels (19–20 March 2024) and Berlin (25 April 2024), engaging over 50 representatives from EU institutions, industry, civil society, and academia. These discussions provided valuable insights that have shaped the 15 policy recommendations presented in the report.
Here’s the quotes from our authors:
Ther recent developments from ThyssenKrupp and ArcelorMittal highlight the urgent need for a Clean Industrial Deal that reflects the realities of the steel industry. New legislation must equip industries with the tools to decarbonise while ensuring efficient resource use. To build a resilient and competitive steel sector, EPICO urges targeted support for fossil-free hydrogen, a Europe-wide assessment of ironmaking’s future, and the creation of lead markets for low-emission steel. Greater collection, sorting, and use of recycled steel are equally critical to strengthen Europe’s industrial leadership.
This publication provides a comprehensive set of actionable recommendations for EU policymaking to reduce emissions across the steel value chain, from ironmaking to finished steel products, and their recovery and re-use. Additionally, it highlights the potential evolution of the value chain itself (due to the growing importance of locations with access to both iron ore and affordable renewable energy) and discusses its relevance for concerns around resilience, competitiveness, and the utilisation of public funds to support the steel industry.
Interested? DOWNLOAD the paper here.
Sustainable Growth and Competitiveness Summit
Image: Paul Marnef/Isoway
The inaugural Sustainable Growth and Competitiveness Summit marked a pivotal step in addressing the challenge of balancing climate neutrality with economic competitiveness in Europe.
The first Summit organised by EPICO KlimaInnovation, in collaboration with leading European think tanks - OIKOS (Spain), ECCO think tank (Italy), Green Economy Institute (Poland), Institute of European Right (Lithuania), Ecologie Responsable (France), and EPG - Energy Policy Group (Romania), was an important success, resulting in an inclusive compass for Europe to achieve net-zero.
The event featured policymakers, industry leaders, and experts to chart a path for a sustainable and resilient Europe.
A key highlight was Krzysztof Bolesta, Poland’s State Secretary for Climate and Environment, who underscored the critical importance of energy security for economic resilience in one of his first public events attended. Reflecting on the upcoming Polish Presidency of the EU, he stated:
After witnessing the attacks on critical energy infrastructure in the Baltic Sea, the upcoming Polish Presidency of the EU believes that the notion of energy security should be enlarged to physical security, cyber security and the security of supply of clean tech.
His remarks gained further prominence through coverage by Euronews.
Another standout moment was the engaging fireside chat with MEP Pilar del Castillo, who shared her insights on the role of innovation and infrastructure in advancing Europe’s energy and climate objectives. She noted:
One of the consequences of the war in Ukraine is that it showed us that the EU is an economic giant, a competing actor on a global level, with chains in its hands due to its energy dependencies.
Key themes from the discussions included:
- The need to unlock the potential of the internal market by completing the Energy Union, with an emphasis on EU-wide solutions over administrative hurdles.
- The importance of a unified industrial strategy to strengthen Europe’s competitiveness and sustainability. Progress on initiatives such as ENNOH and the Omnibus legislation to reduce administrative burdens, along with encouragement to sustain the momentum seen in agreements like MERCOSUR.
Pragmatism was a recurring theme, particularly regarding hydrogen. Rather than debating technicalities, such as colour coding or complex definitions, panellists advocated for a focus on practical applications. Both hydrogen and electrification were recognised as vital, with distinct roles depending on the context.
Broader themes of affordability, energy security, and social cohesion were interwoven throughout the discussions, emphasising the need to ensure that no one—especially vulnerable households—is left behind in the energy transition, particularly concerning the introduction of ETS 2.
The Summit successfully aligned diverse perspectives, offering actionable insights to drive Europe’s energy transition forward while building a sustainable and competitive future.
New Policy Brief: Connecting Borders Through Offshore Hydrogen: Infrastructure and Financing in the North Sea
SAVE THE DATE: The in-person panel discussion on “Accelerating Integrated Infrastructure in the North Sea” will take place January 30, 2025 at the Press Club (Brussels), from 12:30h to 14:30h.
Join our first panel discussion of the year, where we will be exploring the transformative potential of the North Sea in revolutionizing EU energy production and security. Confirmed panellists include Mechthild Woersdoerfer, Deputy Director-General, DG ENER, Sonya Twohig, Secretary-General, ENTSO-E, Christoph von dem Bussche, CEO, Gascade, and Bernd Weber, CEO, EPICO Climate & Innovation think tank.
REGISTER here.
As the EU continues to advance its energy transition, recent policy developments underscore the critical role of hydrogen in achieving energy security and decarbonization. In May 2024, the European Commission introduced the Hydrogen and Decarbonized Gas Market Package, a key initiative aimed at integrating renewable and low-carbon gases like hydrogen into the EU’s energy infrastructure. This package supports the Green Deal’s industrial strategy and reinforces the EU's commitment to reducing energy dependencies and enhancing industrial competitiveness. A crucial element of this strategy is the development of offshore hydrogen infrastructure in the North Sea, where renewable hydrogen can play a transformative role.
Epico’s latest policy brief, "Connecting Borders Through Offshore Hydrogen: Infrastructure and Financing in the North Sea," calls for an integrated approach to cross-border infrastructure planning that can address regulatory, financial, and technical barriers. The new EU policy is a promising step towards overcoming these challenges and creating a coherent framework for offshore hydrogen development, which is essential for the EU’s long-term energy and industrial ambitions.
Key recommendations include:
- Offshore hydrogen for energy security: Offshore hydrogen production helps the EU reduce reliance on imports, provides stable energy supply for the industry while meeting climate targets.
- Think big for economies of scale: Large-scale infrastructure in the North Sea can lower costs for projects and ensure competitive energy pricing for consumers.
- Unified regulatory framework needed: Fragmented regulations across Member States and neighbouring countries are slowing progress—harmonisation is essential. Cross-border collaborations like the North Seas Energy Cooperation are key to developing a unified hydrogen infrastructure.
- Adopting integrated planning for electricity and hydrogen at the EU level,including the European network operators for electricity, gas, and hydrogen (ENTSOE, ENNOH, ENTSOG), alongside Member States and National Regulatory Agencies - is vital to level the playing field to allow infrastructure development in the North Sea.
- Innovative financing: Hybrid financing models, such as the intertemporal cost allocation model to be used for German hydrogen infrastructure, are key to attracting investment while managing risks.
Here’s some quotes from the authors:
Renewable and made-in-Europe hydrogen is possible, but only with rapid scaling of offshore infrastructure in the North Sea. Debates on the Clean Industrial Deal should focus on what technologies are needed to reach net-zero targets and foster the development of offshore hydrogen infrastructure.
Offshore hydrogen production ‘Made in Europe’ in the North Sea has the potential to expand the supply of renewable energy, especially for industry in Germany, and to make it more resilient and efficient. By coordinating the expansion of hydrogen infrastructure in the North Sea, we can not only reduce the costs of expanding the electricity grid, but also increase flexibility in the energy system and obtain renewable energy in a more stable manner. This is not a ‘nice-to-have’, but a key element for affordable energy prices and the competitiveness of Germany as an industrial location.
You can read the full Policy Brief here.
Spotted: EPICO in the Media
- Our Specialist Sam Williams spoke on The Jolt about the current situation one electricity and gas supplies. LISTEN here.
- EPICO’s Parul Kumar and Julian Parodi spoke with Energate on the lack of demand for green steel and the need to promote it though public procurement. READ here (in German).
- A guest speaker on “Brussels, My Love” Sam Williams discussed the key takeaways from COP29 and the role of the transport sector in achieving climate neutrality. WATCH here.
- Tagesspiegel wrote about our policy report highlighting how the green steel revolution could succeed. READ here (in German).
- EPICO’s CEO Dr. Bernd Weber contributed to an op-ed for the Frankfurter Allgemeine Zeitung together with Stefan Kolev from the Ludwig-Erhard-Foundation on the impact of EU ETS 2 on the everyday lives of citizens. READ here (in German).
- On Handelsblatt, EPICO’s CEO Dr. Bernd Weber remarked that ambitious climate protection requires social sustainability. READ here (in German).
Are you a climate and energy journalist looking for new voices to interview? REACH OUT to EPICO’s Media and Communications Specialists Agata Gurgenidze (Germany) and Michela Sandron (EU).
EPICO is growing!
The EPICO team in Brussels has recently welcomed a new colleague: Michela Sandron, EU Communications and Media Specialist. Reach out to her to know more about her work.
As we begin a new year, the journey to net-zero continues, and innovation will light the way. Warm wishes for a successful New Year from all of us at Epico!