May 23, 2023

The National Electrical Manufacturers Association along with a coalition of associations representing different portions of the electrical steel value chain, including home builders, electric utilities, automakers, and electrical workers today called on President Biden to convene an electrical steel summit to gather industry stakeholders to define solutions to current shortages and prepare for expected demand growth. Electrical steel is critical to the national and economic security of the United States and is a vital component in the manufacturing of a range of critical electrical products including, electric motors, transformers, electric vehicle chargers and generators. NEMA and the coalition put forth a set of recommendations that aim to alleviate current and future shortages.

“Increased domestic production capabilities of electrical steel are essential to the Biden administration’s initiatives to electrify our economy and accelerate the energy transition” said NEMA President and CEO, Debra Phillips. “With limited domestic capacity of critical types of electrical steel exacerbated by administration rules to source materials in the U.S., the electroindustry and our supply chain partners are in urgent need of a solution. We urge President Biden to lead this critical dialogue so that we can collectively seize the opportunity to create jobs, reduce emissions, electrify the economy and fortify the grid.”

Electrical steel, including grain oriented electrical steel (GOES) and non-grain oriented electrical steel (NOES), are vital components in the manufacturing of a range of critical electrical products. The U.S. is currently dependent on a single manufacturer for GOES. Our industry, which is central to the electrification of the economy, anticipates the lack of supply will hinder progress towards the ambitious goals and vision of the Infrastructure, Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA). NEMA and the coalition recommend the following immediate steps to mitigate this shortage:

• Convene an “Electrical Steel Summit” to bring together stakeholders for a strategic discussion on the current challenges to sustaining and growing domestic production of electric steel.

• Work with Congress to put requisite financial resources toward shoring up domestic supply

• Guarantee purchase of GOES and NOES up to a defined amount as needed by critical electrical industries to serve a more electrified economy as well as incentivize expanded manufacturing capacity

These recommendations come as the Department of Energy contemplates new efficiency standards on distribution transformers that would upend the market and manufacturing process and as the Department of the Treasury released new domestic content guidance on steel and iron for clean energy manufacturing tax credits. The coalition signatories on the letter include: Alliance for Automotive Innovation, American Public Power Association, Edison Electric Institute, GridWise Alliance, International Brotherhood of Electrical Workers, Leading Builders of America, National Association of Home Builders, National Electrical Manufacturers Association and the National Rural Electric Cooperative Association.