Voestalpine Lobbies Brussels as €100m Green Steel Bet Dovetails with Stricter Import Curbs

Austrian steelmaker Voestalpine invests €100M in electric arc furnace at Donawitz while lobbying EU to halt rising CO2 costs that drain funds for decarbonisation.

Voestalpine has entered a tense tug-of-war with EU policymakers, joining forces with ArcelorMittal and thyssenkrupp to demand a temporary suspension of rising carbon costs — even as the Austrian steelmaker pours fresh capital into its own decarbonisation programme. The three groups, which together account for 60% of Europe’s steel output, argue that the current trajectory of climate regulation is starving the industry of the funds needed for its own green transformation.

The immediate flashpoint is the European Emissions Trading System. As Voestalpine ramps up spending on its “greentec steel” initiative, the progressive phase-out of free CO? certificates is siphoning off cash that could otherwise go toward new plant and equipment. Chief executive Herbert Eibensteiner has made the dilemma plain: the company is investing heavily in low-carbon production, yet Brussels is simultaneously removing a critical source of liquidity.

That investment was laid out in detail on 18 June, when the group unveiled expansion plans for its Donawitz site in Styria. Within a year, a new electric arc furnace (EAF) will be commissioned, with commercial output of 850,000 tonnes of CO?-reduced steel set to begin in 2027. By 2029, Voestalpine expects to shut its first conventional blast furnace. The longer-term target is to convert Donawitz entirely to electric steelmaking by 2030, a move that would cut more than 90% of the site’s emissions versus 2019 levels. The bill for that final stage: around €100 million, subject to clarity on state aid and subsidies. Capacity would then reach 1.5 million tonnes per year.

Parallel to the plant-level overhaul, shifts in EU trade policy are providing a tailwind. From 1 July, import quotas for steel are being halved from their current levels. A more comprehensive safeguard adjustment follows on 1 July 2026, when duty-free allowances are to shrink by roughly 47% relative to 2024. Any steel imported above those quotas will then attract a 50% tariff, double the current rate. For Voestalpine, which competes directly with cheap overseas supply, the tighter barriers should strengthen its pricing power in the domestic market.

The financial backdrop is solid enough to support the transformation. In the most recent full financial year, Voestalpine generated an operating profit of €1.5 billion and cut net debt sharply to €1.3 billion. Management now guides for an EBITDA of €1.60–1.85 billion for the 2026/27 fiscal year, with operating profit expected to climb to as high as €1.85 billion. Shareholders will vote at the upcoming annual general meeting on a proposed dividend increase to €0.75 per share.

The stock closed the week at €43.82, down nearly 6% over the past seven days — a short-term pullback that has not dented a longer run that has seen the shares roughly double over twelve months and gain about 13% year-to-date. The price remains comfortably above its 200-day moving average, though the management has acknowledged that geopolitical volatility remains a wildcard that could buffet the broad-based industrial group.