19 May 2025 – Like steel, cement is considered a particularly CO2-intensive building material and is produced in the EU with outdated and inefficient plants, just like almost 56% of domestic steel makers. However, it appears that large companies are lacking the will to realise this, while small and medium-sized companies are once again looking for innovative solutions. The Eurozone Industrial Production Index is rising significantly and in March 2025 showed the highest increase since 2021.
- A model for steel? The move away from cement
- SMEs must find innovative solutions
- Cement production in the EU is outdated
- EU steel mills are seen as innovation deniers
- Energy efficiency: China has been outperforming the EU in aluminium for years
- Innovation in steel only on the EAF route?
- Steel: focus on the wrong lobbying activities?
- Rather calls for further trade defence measures and the Carbon Border Tax CBAM
- Eurozone industrial production: highest increase since 2021
A model for steel? The move away from cement
Together with steel, cement is one of the world’s biggest sources of CO2 emissions. Energy-intensive cement production accounts for around 8% of this, and steel production for up to 10%. Both industries are integrated into the EU Carbon Border Tax CBAM.
SMEs must find innovative solutions
Small and medium-sized companies in the EU in particular are therefore called upon to find innovative solutions to reduce CO2 emissions. In the case of cement in particular, only around a third of climate-damaging emissions can be reduced using renewable energies.
According to a recent article in the German business magazine WirtschaftsWoche, an SME from the federal state of Lower Saxony has once again proven that this is even economically feasible. Cement manufacturer Kortmann Beton offers cement-free foundations for e-charging stations, for example. The company is also about to launch so-called geopolymer clinker bricks. Although these will be somewhat more expensive than normal clinker bricks, they will offer additional benefits such as individual colour customisation. The aim behind this is to permanently reduce the company’s own production-related CO2 emissions, the added value of which will be passed on to customers.
SMEs in particular are seen as drivers of innovation compared to large corporations, which in the scientific community are considered to be rather slow and less adaptable with large market concentrations and often even prevent innovation.
Cement production in the EU is outdated
Cement has also long been criticised for being produced using outdated and CO2-intensive plants. In 2017, EU clinker production was still the absolute bottom performer in terms of energy consumption – even behind Russia and the United States. This is a clear indication of how the free allocation of EU ETS certificates has undermined the innovation potential of the cement sector, as well as steel production.
EU steel mills are seen as innovation deniers
European steel mills in particular have long been among the innovation deniers in the EU. Since 2014, their CO2 emissions have hardly decreased and if they have, it is only because less steel has been produced there and thus more free EU ETS certificates have been sold on the free market. Projects aimed at switching to more CO2-neutral production have been postponed indefinitely in some cases, especially by steel mills that produce on the blast furnace route. This demonstrates the lack of willingness to innovate and the excessive demands for subsidies and market protection from European steel mills.
Energy efficiency: China has been outperforming the EU in aluminium for years
Even in the case of aluminium produced in Europe, it was recently shown that China now requires 14% less energy to produce one tonne of aluminium than European manufacturers – who have not seen any energy reduction in their production for over a decade.
Innovation in steel only on the EAF route?
But there are also opportunities to switch to clean production methods for steel. Some steel makers that produce steel on the so-called secondary route using the EAF process have already switched to renewable energy and increased the proportion of scrap in their production, if this was not already high.
Steel: focus on the wrong lobbying activities?
Instead of lobbying for a decoupling of prices for renewable energies in the European electricity market, they prefer to demand compensation payments from the EU and the member states. Or finally shutting down the CO2-intensive blast furnaces and replacing them with modern EAF and DRI plants will unnecessarily prolong the life of an outdated technology. The blast furnace route is also considered to be significantly more cost-intensive than the EAF route.
Rather calls for further trade defence measures and the Carbon Border Tax CBAM
However, the innovation deniers prefer to hide behind demands for further trade defence measures that distort competition and the Carbon Border Tax CBAM, which is seen as a bureaucratic monster and anti-competitive for small and medium-sized companies. While domestic steel makers themselves continue to import millions of tonnes of CO2-intensive raw materials such as slabs.
Innovative concepts such as those from Lower Saxony in Germany therefore show that SMEs need to be drivers of innovation and, by necessity, more adaptable, as they are regularly bypassed by legislators.
Large and rigid companies such as steel makers, on the other hand, are subsidised and protected, but would rather pay out billions in dividends to their shareholders than invest in climate protection and more competitive production.
Eurozone industrial production: highest increase since 2021
One piece of good news that went relatively unnoticed was published last week by the EU statistics authority EUROSTAT with the Eurozone Industrial Production. According to this, industrial production in the EU rose by 2.7% in March 2025 compared to the previous month, and even by 3.6% in the eurozone. This is also the highest increase in the EU since January 2021.
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