The European Commission has given the green light to a €390 million Italian state rescue loan for Acciaierie d’Italia (AdI), formerly known as ILVA, Italy’s largest integrated steel

producer. The decision, taken under EU State aid rules, is designed to keep the company operating while Italy completes the sale of the business to a new owner through an ongoing tender procedure.

Lifeline for Italy’s biggest steelmaker

Acciaierie d’Italia operates eight production and service sites across the country, with its core operations based at the vast steel plant in Taranto. The group employs around 10,000 people, including roughly 8,000 workers at the Taranto site alone. Covering 15 million square metres, the plant has an authorised production capacity of up to 6 million tonnes of crude carbon steel per year and supplies key sectors such as automotive manufacturing, household appliances, construction, infrastructure, packaging, mechanical engineering and energy.

Since February 2024, AdI has been under insolvency proceedings and is struggling with severe liquidity constraints. While Italy works to finalise the sale of the business, the company needs short-term financing to pay wages, suppliers and other day-to-day operating costs. The Commission-approved loan is intended to bridge this gap for the coming months.

How the Commission assessed the aid

Because the steel sector is currently excluded from the EU’s 2014 Rescue and Restructuring (R&R) Aid Guidelines, the Commission assessed the Italian measure directly under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU). This provision allows Member States to support certain economic activities, provided competition and trade within the EU are not unduly distorted.

In its analysis, the Commission also took into account the ongoing revision of the R&R Guidelines, which is expected to extend their scope to the steel sector in light of major changes in global and European steel markets since 2014.

Brussels concluded that the Italian loan meets EU State aid requirements for several reasons:

- Preventing social and economic damage: A sudden shutdown of AdI would have severe social consequences, particularly in the Puglia region, where unemployment is already persistently above the EU average. It would also disrupt industrial value chains that depend on steel supplies.

- Proportional and limited support: The €390 million loan is capped at the company’s projected liquidity shortfall and can only be used to cover normal operating costs.

- Market-based terms and short duration: The loan is priced at a market rate, lasts for a maximum of six months, and Italy has committed to either submit a restructuring or liquidation plan, or demonstrate repayment once the period ends.

- No recent prior aid: Neither Acciaierie d’Italia nor its predecessor ILVA has received rescue or restructuring aid in the past decade.

On this basis, the Commission found that the measure does not unfairly distort competition or trade within the EU internal market and formally approved the aid.

A precedent for the steel sector

The Commission also announced that it will apply the same approach used in this decision to future cases involving rescue or restructuring aid for steel companies in difficulty, ensuring equal treatment across the internal market.

Environmental compliance remains separate

The approval does not affect a long-running infringement procedure against Italy, launched in 2013, over failures to fully implement the EU Industrial Emissions Directive at the Taranto plant. The Commission stressed that the rescue loan can only be used for short-term operating costs and does not prejudge any future enforcement action.

Italy remains obliged to bring the plant into full compliance with EU environmental law as quickly as possible. According to commitments announced by the Italian government, the future owner of the site will be required to decarbonise operations, shut down coal-fired facilities as soon as possible, install up to three electric furnaces to cover authorised capacity, and fully comply with the plant’s environmental permit.

In short, the Commission’s decision provides temporary financial breathing space for Italy’s flagship steelmaker—while keeping pressure on both Rome and the future operator to deliver long-term industrial and environmental solutions.