Arvedi Ast raises the alarm: energy costs are no longer sustainable

“The burden of energy costs for Arvedi Ast and for the Italian steel industry has become unsustainable.” This is the claim made by the group to which the Terni-based steelworks belongs. “We find ourselves operating in a European market characterised by significant distortions of competition and substantial discrimination against Italian producers,” the company states in a press release. “We are not asking for preferential treatment, but simply that an Italian company competing in the European market should be able to purchase energy on terms comparable to those of its competitors,” it reiterates. “Italian producers are forced to source their main cost component in an energy market that is particularly disadvantageous compared to that of their main European competitors,” argues Arvedi Ast. “The group,” the statement continues, “has, since 2022, embarked on a revitalisation programme in Terni through a strategic investment plan, aimed at boosting competitiveness by rebalancing and optimising the plant’s production capacity, whilst maximising the production of cold-rolled steel and simultaneously reducing the environmental impact of the processes and processing costs.” With over 2,550 workers, comprising direct employees and agency staff, plus around a thousand workers in related industries, Arvedi Ast is one of Umbria’s leading industrial and employment hubs.

“The damage we are suffering,” states Arvedi Ast, “is such that it poses a real threat to the company’s continued production and its economic and employment sustainability. In this context, the Arvedi Group, prioritising the protection of jobs and the industrial future of its employees, has resolutely pursued an investment plan worth over 500 million euros, significantly bringing forward the timetable set out in the Programme Agreement signed with the institutions. The widening of the energy cost differential compared with Arvedi Ast’s main European competitors will result in such a significant increase in production costs that, if passed on to sales prices, it would render Arvedi Ast’s products uncompetitive, with significant consequences for production levels and, consequently, employment levels.” ‘For Arvedi Ast,’ the statement continues, ‘it is now, more than ever, essential and strategic that the measures already identified and formalised as part of the commitments set out in the 2025 Programme Agreement be implemented immediately. These measures consist, on the one hand, of access to a share of the hydroelectric power generated in Umbria by the Galleto Power Station on competitive economic terms consistent with the plant’s actual generation costs and with the commitments undertaken in the Programme Agreement and, on the other hand, the introduction and full implementation of the subsidy for the use of stainless steel scrap. The timely implementation of these measures is an essential condition for safeguarding the competitiveness of Acciai Speciali Terni and ensuring its employment levels. The persistence of these highly detrimental market conditions will inevitably lead to measures that will affect the continuity of production. The energy issue does not concern Arvedi Ast alone. It concerns Italia’s ability to maintain strategic industrial production, whilst supporting investment, employment and the ecological transition’.

“The issue raised by Arvedi-Ast regarding energy costs makes it imperative to bring forward the reconvening of the Programme Agreement round table. This is the mechanism through which institutions and the company have assumed, through mutual and detailed commitments, a fundamental responsibility for shaping the future of production and employment at the Terni site,” said the Umbrian Regional Councillor for Economic Development and Employment, Francesco De Rebotti, following statements by Arvedi-Ast’s Chief Executive, Dimitri Menecali, regarding the difference in energy costs incurred by the Italian steel industry compared with its main European competitors. “The issue of energy is not one that has only just emerged,” he added. “In fact, it was one of the main critical issues that emerged during the long process leading up to the signing of the Programme Agreement,” De Rebotti stated in a note, “following a phase marked by constant delays and difficulties in finding conditions capable of sustaining the site’s competitiveness. It is precisely for this reason that the Region has begun to address the issue, aware that energy costs represent a decisive factor for the future of an industrial entity such as AST and, by extension, for the entire economic and employment system of Terni and Umbria.”

With regard to the statements made by the Umbria Region concerning the Programme Agreement for Acciai Speciali Terni, sources at the Ministry of Enterprise and Made in Italy (Mimit) clarify that all the commitments assigned to the Ministry under the Agreement – signed in July 2025 – have been fulfilled. On the energy front, Article 7 of the Agreement, which deals with energy costs, does not impose any specific obligations on the Ministry. The measures provided for relate to commitments undertaken by the Region, including in coordination with the company: the assessment of mixed-management models for large hydroelectric schemes, the allocation of a share of production to energy-intensive businesses in Umbria, and solutions for the Pentima power station. The Government’s commitment, on the other hand, concerned support for the use of stainless steel scrap. Article 6-bis of the Agreement provided for the submission to Parliament, by 31 December 2025, of a measure introducing a tax credit for electric arc furnace steelworks producing stainless steel from scrap. This commitment was met on schedule: the measure was introduced via the Budget Act (Article 1, paragraphs 801–805, of Act No. 199 of 30 December 2025). The provision is now undergoing the notification process with the European Commission to verify its consistency with the 2022 Framework for State Aid for Climate, Environment and Energy (CEEAG). This is a necessary step for the measure’s implementation. The Ministry is overseeing this process alongside all the relevant central government departments and the company, and this has been the focus of discussions over recent months. The Ministry, the sources further clarify, recognises the need to enable AST to compete in a European market characterised by significant differences in energy costs. On this issue, the Government is also engaged at European level, to safeguard a strategic site for the national steel industry. To take stock of the implementation of all commitments, both public and private, the Ministry of Infrastructure, Transport and Tourism (MIMIT) will convene, as a matter of the utmost urgency, the inaugural meeting of the Executive Committee provided for in Article 9 of the Agreement and the monitoring committee for the Programme Agreement. At that meeting, each of the Parties will report on the commitments falling within their remit.