European Commission Approves €390 Million Rescue Loan for Italy’s Largest Steel Producer

The European Commission has approved a rescue loan of up to €390 million for Acciaierie d’Italia (AdI), formerly known as ILVA, under EU State aid rules.

The decision allows Italy to provide short-term liquidity support to its largest integrated steel producer while a tender process to transfer the business to a new operator is still underway. The loan is designed to cover basic operating costs only — including wages and payments to suppliers — during the interim period.

A critical industrial employer under pressure

AdI operates eight production and servicing sites across Italy, with its largest facility located in Taranto, southern Italy. The Taranto plant alone employs around 8,000 workers, occupies 15 million square meters, and has a capped production capacity of six million tonnes of crude carbon steel per year.

Its output feeds a wide range of industries, including:

• automotive and component manufacturing

• household appliances (“white goods”)

• construction and infrastructure

• packaging

• mechanical engineering

• energy-related industries

In total, AdI employs approximately 10,000 people, making it a cornerstone of Italy’s industrial supply chain.

Insolvency, tender process, and short-term liquidity needs

AdI has been undergoing an insolvency procedure since February 2024 and is currently subject to an ongoing tender process aimed at transferring operations to a new owner. Italian authorities expect the sale to be completed soon.

Until that transition occurs, the company faces acute liquidity constraints, threatening its ability to meet payroll and supplier obligations. The approved rescue loan is intended to bridge this gap — and nothing more.

Why the Commission approved the aid

Because the steel sector is currently excluded from the EU’s 2014 Rescue and Restructuring Aid Guidelines, the Commission assessed the measure directly under Treaty on the Functioning of the European Union rules — specifically Article 107(3)(c), which allows State aid that supports certain economic activities under strict conditions.

In its assessment, the Commission found that:

• Social harm would be significant if operations ceased abruptly, particularly in Puglia, a region where unemployment consistently exceeds the EU average.

• The loan is strictly proportionate, limited to the projected liquidity shortfall and normal operating costs only.

• The financing is priced at market rates, available to comparable companies, and limited to six months.

• Italy is legally required, after that period, to submit either a restructuring plan, a liquidation plan, or proof of reimbursement.

• Neither AdI nor its predecessor ILVA has received rescue or restructuring aid in the past ten years.

On this basis, the Commission concluded that the measure does not distort competition or unduly affect trade within the EU internal market.

A broader shift in how steel is treated

Notably, the Commission stated that it will now apply the same analytical approach used in this case to future rescue or restructuring aid for steel companies. This reflects recognition that steel markets have changed substantially since 2014, both within Europe and globally.

The move also anticipates the Commission’s ongoing revision of the Rescue and Restructuring Guidelines, which is expected to expand their scope to include the steel sector.

Environmental compliance remains separate — and unresolved

The approval comes against the backdrop of a long-running infringement procedure dating back to 2013, concerning Italy’s failure to fully implement the EU Industrial Emissions Directive at the Taranto plant.

The Commission stressed that:

• The rescue loan is strictly limited to short-term operating costs and

• Is without prejudice to any future enforcement action related to environmental compliance

Italy remains legally obligated to bring the plant into full compliance as quickly as possible.

According to commitments announced by the Italian government, the future operator of the Taranto facility will be required to:

• rapidly shut down coal-fired “hot areas”

• build up to three electric furnaces to cover the plant’s authorised capacity

• fully comply with environmental permit requirements

What happens next

The non-confidential version of the Commission’s decision will be published under case SA.121569 in the EU State aid register once confidentiality issues are resolved.

For now, the decision reflects a careful balancing act: preventing immediate social and economic disruption, while keeping competition rules intact and environmental obligations firmly on the table.

As Europe rethinks industrial resilience, decarbonisation, and strategic autonomy, this case offers a clear signal: temporary support may be allowed — but only with tight limits, timelines, and accountability.