Europe is entering a period of extraordinary investment in electricity infrastructure. As economies electrify, power generation expands and new sources of demand – from data centres to industry and transport – come online, the electricity network will need to grow and adapt at unprecedented speed.
That makes one question increasingly important: can Europe build the power grid equipment it needs quickly enough? Transformers are among the most critical components of that equation. They sit at the heart of the electricity system, enabling power to be transmitted efficiently and ultimately delivered where it is needed.
That is why the European Commission’s provisional safeguard measures on grain-oriented electrical steel (GOES), in force since 25 September 2026, deserve careful consideration. Strengthening Europe’s industrial base and reducing vulnerabilities in strategic supply chains are legitimate objectives. But measures designed to protect one part of the energy technology supply chain should not inadvertently make it harder and more expensive to build another.
GOES is a highly specialised material used in the manufacture of transformer cores. Europe has important GOES production capacity, but it does not currently produce enough of the material – particularly the highest-performance grades – to meet the needs of its transformer industry.
The Commission’s new measures introduce tariff-rate quotas and price thresholds for GOES, while also covering laminations and transformer cores. In addition, there’s an added duty on GOES incorporated into imported transformers, intended to address the supply chain as a whole. Yet, the sum of it all still work against the European transformer manufacturers.
Proponents of the safeguard point to its ‘whole valuechain’ approach, arguing that the €1,140-per-tonne duty applied to GOES incorporated in imported transformers protects downstream manufacturers. However, the numbers tell a different story.
Based on current market conditions, European transformer manufacturers face a competitive disadvantage of around €3,000-pertonne, significantly exceeding the duty relief provided for GOES embedded in imported transformers. Without a more proportionate adjustment, the measure is to undermine the competitiveness of Europe’s transformer industry and incentivize greater reliance on imported finished transformers rather than supporting domestic manufacturing. Similarly, this would also have adverse consequences for the European GOES industry as imported finished transformers entering the EU will hardly use European GOES for its transformers.
The wider implications matter because Europe already imports significant quantities of transformers. The value of finished transformer imports has increased substantially in recent years, from around €500 million in 2020 to approximately €2.4 billion in 2025. For critical infrastructure such as transformers, Europe needs policies that strengthen security of supply and support domestic manufacturing capacity, not the incentives to accelerate the import trend.
Europe needs investment in domestic manufacturing capability, but it also needs the physical infrastructure that manufacturing enables. Every additional cost or delay in procuring transformers can have consequences for the expansion of transmission and distribution networks, the connection of new power generation and the electrification of transport, buildings and industry.
The scale of the challenge is already considerable. Grid investment must increase dramatically if Europe is to connect new generation and meet rapidly growing electricity demand. At the same time, governments and businesses are rightly focused on resilience and reducing strategic dependencies.
Those objectives are closely connected.
It is in Europe’s interest to want a competitive and resilient GOES industry. A stronger European supply of this strategically important material would benefit the wider energy system. But the answer should be to encourage investment in production capacity, innovation and the highestgrade materials – not to increase the cost of the transformers that consume them.
There are also more targeted tools available when the concern is unfair competition. Where dumping or subsidisation is demonstrated, trade defence instruments can address those practices directly, while industrial policy can help develop additional European capacity.
That is particularly important at a time when Europe cannot afford to choose between industrial competitiveness and the energy transition. It needs both.
The electricity system of the future will require enormous quantities of equipment capable of moving power safely, efficiently and reliably. Transformers are a fundamental part of that system, and the specialised materials used to manufacture them are equally important.
Europe therefore needs policies that make it more attractive to manufacture transformers here, expand capacity and invest for the long term. The challenge is not simply to secure the materials that go into Europe’s grids. It is to ensure that Europe can turn those materials into the equipment its grids urgently need.
To make Europe’s future electric, more grid infrastructure is needed, and transformers are at the very heart of it. The policy environment should make building Europe’s electricity grid easier – not more expensive.
