EU Green Procurement Rules Face Industry Criticism Over Weak Steel and Fertilizer Demand

Hydrogen Europe

EU green procurement rules are drawing sharp criticism from Hydrogen Europe after leaked draft legislation reduced the proposed low-carbon steel requirement in public procurement to 25pc from an earlier 70pc. The industry group said the change weakens the demand signal needed to support green steel, hydrogen, and low-carbon industrial investment.

EU green procurement rules in the latest draft require steel used in buildings, infrastructure, and transport projects to include at least 25pc low-carbon steel by volume. Hydrogen Europe argues that this level is too low to create a bankable market for emerging producers such as Stegra, Hydnum Steel, Saarstahl, and Salzgitter.

The dispute highlights a central problem in Europe’s industrial transition. Producers are being asked to invest in low-carbon steel, hydrogen, and cleaner fertilizers, but public procurement rules may not create enough guaranteed demand to justify those investments.

Low-Carbon Steel Requirement Falls Short of Industry Expectations

The reduction from 70pc to 25pc changes the industrial meaning of the proposal. A higher procurement target would have created a stronger lead market for European green steel, giving producers clearer demand visibility and helping justify capital spending on hydrogen-based and low-emission production routes.

Hydrogen Europe said the current draft does little to improve competitiveness against Chinese steel and Russian fertilizer imports. This is important because European producers face higher energy costs, strict carbon rules, and heavy investment requirements, while import competition continues to pressure margins.

The Industrial Accelerator Act still recognizes energy-intensive sectors through greenhouse gas intensity classification systems. These include fertilizers, chemicals, rubber, paper, plastics, coke, refined petroleum products, cement, glass, steel, and aluminium. However, the draft does not set green public procurement requirements for most of these product groups.

Fertilizer Sector Waits for Stronger Demand Measures

The fertilizer sector appears to receive limited support in the current draft. Industry sources said the sector may need to wait for the Fertiliser Action Plan, expected in the second quarter, for more concrete demand-side measures.

Low-carbon fertilizers matter because they connect clean ammonia, hydrogen demand, agriculture, and food supply chains. However, procurement requirements are more politically complex because agriculture remains highly sensitive to cost increases and supply security concerns.

The final clean product procurement percentage will be negotiated over the next 12-18 months by the European parliament and EU member states. That process will determine whether EU green procurement rules become a serious industrial policy tool or remain a limited climate-labeling framework.

The Metalnomist Commentary

Europe’s problem is no longer only technology readiness; it is market creation. Without stronger demand rules for low-carbon steel, hydrogen, and fertilizers, the EU risks asking companies to invest in clean capacity without giving them a reliable customer base.