Category: Latest Updates

The European Commission’s latest proposals on the Carbon Border Adjustment Mechanism (CBAM), unveiled today, correctly identify several loopholes that risk undermining its effectiveness, notably regarding EU exports, downstream sectors and circumvention practices.

However, despite these laudable efforts, the measures put forward fail to deliver a comprehensive and durable response to carbon and jobs leakage, warns the European Steel Association (EUROFER).

“Recognising the weaknesses of CBAM and proposing remedies is a long-awaited and necessary first step to ensure the effectiveness of the mechanism. However, the solutions proposed so are insufficient, and fail to address key weaknesses. They do not yet provide the level of protection against carbon and jobs leakage European steel urgently needs to successfully transition while remaining competitive on global markets. If the EU wants to lead by example and match its climate ambition with a credible industrial policy, CBAM must be made rock-solid and watertight – and this, from day one”, said Axel Eggert, Director General of EUROFER.

In particular, the approach to EU exports remains piecemeal and lacks a structural solution. The proposed measures are limited both in time, with a duration of only two years, and in product scope, with less than a quarter of steel exports covered. Moreover, the financial resources of such Transitional Decarbonisation Fund are highly uncertain. Without a long-term and comprehensive solution, EU steel producers remain at a competitive disadvantage on global markets.

The Commission also rightly acknowledges circumvention risks, including resource shuffling. Such practice, if not properly addressed, would favour creative emissions accounting by artificially lowering reported emissions without driving their reduction at global level. While this recognition is welcome, the proposed measures are highly uncertain in time and effectiveness since they do not provide convincing deterrents but only potential ex-post fixes to be developed by the Commission in future implementation rules. The inclusion of pre-consumer scrap as a CBAM precursor, which was a priority only for an aluminium operator, risks creating countereffects in the steel sector.

As regards downstream sectors, the Commission proposes extending CBAM coverage only to a very limited number of downstream products. While this constitutes a first move in the right direction, it falls short of protecting downstream products at risk of carbon leakage, leaving gaps along the value chain and creating new potential loopholes.

“We sincerely appreciate the Commission’s continued engagement with the steel sector to implement the Steel and Metals Action Plan (SMAP), but goodwill alone is not enough. Without structural solutions, CBAM risks backfiring by further penalising European steelmakers and their customers striving for decarbonisation in a challenging geo-economic environment where massive overcapacity, high energy prices and unfair trade practices do not allow any margin for error any longer. We stand ready to discuss further with the legislators how to make CBAM fully watertight and effective for our value chains.”, concluded Axel Eggert.

ArcelorMittal Belgium has announced that construction of its Baekeland high-voltage substation has officially begun, marking a significant step toward electric and low-carbon steel production.

The facility is designed to receive electricity via high-voltage cables and overhead lines and transform it into voltage levels suitable for large industrial consumers. Once operational, it will become a key node in the Belgian electricity grid, strengthening power supply to the port area and surrounding industrial sites.

Key role in Belgium’s energy transition

The Baekeland substation is expected to play a central role in supporting the regional energy transition. From 2030 onwards, ArcelorMittal Belgium will be the first company to be directly connected to the high-voltage grid.

For ArcelorMittal Belgium, the project is a critical enabler of its decarbonisation strategy. The planned transition toward electric steelmaking, including future electric arc furnace (EAF) operations, requires substantially higher electricity volumes than can be delivered through the company’s existing 150 kV connection.

To address this constraint, ArcelorMittal Belgium signed an agreement with Belgian transmission system operator Elia to secure access to the 380 kV high-voltage grid. This new connection will provide the capacity needed to operate electric steelmaking facilities and reduce the carbon intensity of steel production.

With construction works now under way, the Baekeland high-voltage substation is scheduled to enter operation in 2030, aligning with ArcelorMittal Belgium’s longer-term roadmap for electric, low-emission steel production.

The documents outline a substantial widening of CBAM’s product coverage into downstream manufactured metal goods. If confirmed, these amendments would represent the most significant extension of the regulation’s scope since its introduction.

Earlier this year, Europe’s steel distributors urged the Commission to extend CBAM and other trade defense instruments to cover high-risk steel-containing goods.

The newly covered sectors will be included from January 1, 2028, Fastmarkets understands, subject to final adoption of the addition.

The proposal was published on the website of the European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD), together with several other CBAM-related documents.

Provisional benchmarks and default values published on the website were unchanged from those outlined in drafts leaked last week.

Combined metal products brought into scope
The new annexes show sweeping additions, particularly in the newly introduced “combined metal products” category. This includes metal mesh and netting, fasteners, hardware fittings, pumps, burners, refrigeration equipment, industrial machinery, electrical motors and transformers, conductors and cables, cranes and conveyors, and even metal furniture and prefabricated buildings.

Several categories of goods vehicles, chassis, gearboxes, wheels, suspension systems, and radiators have also been added.

Market participants noted that these additions represented a major shift in the architecture of CBAM, which originally focused on upstream commodities such as flat steel and basic aluminium. By contrast, downstream manufactured goods – often containing mixed metal inputs – will now require emissions accounting and CBAM declaration at customs.

“This is going to hit a much broader part of the value chain than expected,” a European trader said. “Importers of machinery, equipment, components – they will all become CBAM operators.”

Revisions affecting iron and steel
The amendment also offered massive expansion to the iron and steel table, notably suggestions to cover structures, cast articles, containers, tubes, fittings, springs, fasteners, and household metal goods.

A full list of the CN codes of good covered by CBAM can be found at the DG TAXUD link above.

Scrap clarified as precursor
The updated documents also introduced new rules for scrap used as an input material in imported downstream goods. While scrap itself remained outside CBAM’s scope and was not a CBAM-taxed import, embedded emissions from pre-consumer scrap must now be counted when calculating the total emissions of complex goods.

This only concerned pre-consumer scrap, however, while post-consumer scrap was still assigned zero embedded emissions.

The Commission introduced these clarifications “to avoid loopholes in emissions reporting for goods with recycled content,” one market source said.

Industry reaction
Overall, market reaction to the downstream expansion of CBAM was mixed.

Representatives of the steel processing sector largely welcomed the move, claiming that it “closed the loopholes” and would shield the EU’s manufacturing sector.

“That’s very positive news. It seems that most of the relevant items are added to the system,” a steel-service centre in Italy said.

But some felt that the delayed inclusion of imported steel derivatives – steel-intensive imported products – into the scope of CBAM was “wrong.”

“Better late than never, but 2028 is way too late,” another steel service centre in Southern Europe said. “We will lose manufacturing industry by then.”

At the same time, other market sources told Fastmarkets that the extensions would significantly increase the administrative burden for importers of finished and semi-finished goods, but noted that the Commission intended these measures to prevent carbon leakage across longer value chains.

“Best intentions, but messy result. A lot of companies are waking up to the fact that their CN code is now on the list and they are unable to manage CBAM complexity and the financial burden,” a steel trader in Italy said.

“Manufacturing hubs exporting machinery or components into Europe are now in scope,” a trading source in Germany said. “The downstream effect is very real. I think it’s great for steel-service centres, but a disaster for the EU economy.”

Some industry participants highlighted the lack of preparedness among downstream sectors that had not expected CBAM to apply to their goods.

The VDMA (Association of German Mechanical and Plant Engineering) was even more outspoken, claiming that the CBAM expansion “threatens Europe’s mechanical engineering industry.”

“The Commission fails to recognize that extending the scope to other steel- and aluminium-intensive downstream products, such as cranes or machine parts, would further increase costs and bureaucratic burdens for the mechanical engineering sector. This would also significantly increase the risk of production relocating out of the EU,” Holger Kunze, head of the VDMA’s European office, said on December 17.

Next steps
While the updated CBAM annexes and related documents have been published on the European Commission’s DG TAXUD website, they have not yet appeared in the EU Official Journal. Market sources said that the measures were considered technically final, but still subject to formal adoption.

Many market sources earlier suggested December 17-18 as possible dates for a final updates rollout. As of December 17, however, no updates have been published in the EU Official Journal.

The European Commission is proposing to broaden the regulatory scope of its Carbon Border Adjustment Mechanism (CBAM), as detailed in draft legislation seen by McCloskey 16 December and officially presented 17 December.

The draft regulation covers three primary areas relevant to iron and steel, proposing the extension of the instrument to downstream steel-containing goods; the inclusion of pre-consumer scrap as a CBAM-liable precursor; and the creation of new anti-circumvention protections – all to take effect from 2028.

Commitments to extend the scope of CBAM were written into the Commission’s Steel and Metals Action Plan (SMAP) back in March, with a legislative proposal scheduled for fourth quarter 2025.

The proposals directly relevant to the iron and steel sector should take effect from 2028, in time for CBAM’s third reporting period under its definitive phase.

Implementing acts relating to the technical implementation of CBAM’s existing scope have also been “provisionally published” 17 December, with no changes to calculation values from McCloskey’s latest analysis. All legislation released as part of the Commission’s CBAM package 17 December is available here.

Downstream Extension

Industry representatives such as European steel distribution association Eurometal have been loudly proclaiming the threat presented by CBAM – compounded by other forthcoming restrictions to import accessibility – in facilitating or even incentivizing the displacement of carbon leakage further down the steel value chain.

In the Commission’s accompanying report on the performance of the CBAM regulation to-date, this risk is described as a “dual cost push” for downstream producers, resulting in “higher input prices for both domestically sourced and imported basic goods.”

As noted by the Commission, “risk of carbon leakage is likely to shift from the upstream sectors covered by CBAM to later stages of the value chain that remain exposed,” which would “severely undermine CBAM’s climate effectiveness if left unaddressed.”

The Commission plans to remedy this weakness by extending CBAM’s scope to steel-intensive goods, with liability to CBAM from the listed downstream steel-containing goods or “combined metal products” assessed on the basis of the embedded emissions of their input materials, otherwise known as precursors. This is to ensure mirroring with the defined scope of the EU Emissions Trading System (EU ETS), as well as due to “challenges in data collection along the supply chain of some of the components of these goods,” necessitating practical simplifications.

For some such products – where “verified information of the actual emissions of their input materials (precursors) will be administratively difficult” – default values will be applicable without any mark-up “due to the complexity of the supply chain.”

The Commission has selected products for the downstream extension of CBAM on the basis of carbon leakage risk, on indicators of “trade intensity and cost push.” “Trade intensity” defines the risk of carbon leakage in terms of tradability or substitutability of the good with third country imports, whereas the “cost push” indicator “expresses the carbon cost […] relative to the overall value of a product.”

The range of downstream products selected includes “machinery, hardware and fabrications, vehicle components, domestic appliances and construction equipment.” The Commission says this range represents “about 15% of the CBAM goods already in scope” – or a 53% share of existing coverage in terms of value.

“The vast majority, 94%, of these downstream goods concerned are industrial supply chain products with a high (on average 79%) steel and aluminium content, used in heavy machinery and specialized equipment, such as base metal mountings, cylinders, industrial radiators, or machines for casting,” says the Commission. “A small share, 6%, of the downstream goods concerned are also household goods.

“An EU producer of such downstream products can face increased costs for the steel and aluminium materials used in the production process.”

Beyond the listing of CN codes included in the extension of CBAM’s scope from 2028 – outlined in appendix I to this article – limited detail is provided as to how CBAM liabilities for downstream products will be specifically calculated. McCloskey’s conversations in the past months with those close to the drafting process suggested that the Commission would designate ‘default’ shares for CBAM goods in the constituent make-up of downstream products (e.g designating a refrigerator as containing X% carbon steel), to be adjusted to total the weight of the downstream import, as declared in customs processes.

This approach is alluded to in the Commission’s Q&A, which notes “the proposed list also includes more complicated goods based on multiple CBAM inputs such as washing machines, which consist of around 60% steel, 5% aluminium and 5% cement.”

It is likely that these nuances of extending CBAM to will be clarified as CBAM proceeds through its definitive stage, in the form of subsequent implementing and delegated acts.

Jan-Joost den Brinker of CBAM management and consultancy firm Dubrink, summarized the potential impact of the extension, describing it as “massive”. The Commission’s own CBAM report cites an expected doubling to 40,000 CBAM declarants as a result of the proposed extension to downstream goods, up from the 20,000 anticipated for the 2026 reporting period, post-simplification package.

“We work with the largest EU customs brokers, all providing Dubrink with full goods-code datasets for compliance tracking. 

When running a query in our data, comparing this now extended CBAM with its previous scope, the number of importing companies liable to CBAM doubled.

At first, I assumed it was an error on my side – but this number aligns closely with the Commission’s own expectations. This scope expansion is truly massive.”

  – Jan-Joost den Brinker, Dubrink

Anti-circumvention – Scrap as a Precursor

Across its communications and legislative proposals, the Commission also holds that pre-consumer scrap should be included in the scope of CBAM – though only as a precursor – due to existing coverage under the EU ETS.

As pre-consumer scrap has embedded emissions inherently linked to the production process of its associated steel product, non-inclusion of pre-consumer scrap presents a mis-match or “loop-hole” in comparison to domestic carbon cost obligations. As the ETS records emissions on an installation level, domestic producers must surrender EUAs for said scrap despite its lack of subsequent transformation or consumption, as part of its holistic production.

Inclusion of pre-consumer scrap as a CBAM precursor would force third country producers using scrap in their production processes to include the emissions embedded from the scrap’s original production process in the emissions portfolio for their secondary steel products, inflating the specific embedded emissions for these goods. Post-consumer scrap was considered by the Commission for inclusion, but was ultimately rejected so as not to “disincentivise the circular economy.”

The proposal would extend CBAM liabilities to ferrous scrap precursors under CN code 7204 – with the exception of post-consumer scrap.

Anti-circumvention – Policing Powers

The provisions addressing potential circumventions of CBAM introduce new powers for the European Commission, allowing them to adopt delegated acts applying “conditions to be fulfilled for the use of actual emissions,” where evidence points “towards a high risk of abusive practices.”

‘Abusive practices’ are defined in reference to the use of ‘actual’ emissions for the purpose of “unduly avoiding, wholly or partially, the CBAM financial liability.” The anti-circumvention provisions proposed would grant the Commission authority to limit CBAM declarations for “a combination of goods and origins” to default values, via delegated acts to be adopted three months where a “risk of abusive practices” has been evidenced, “on the basis of any relevant source of information.”

If an importer submits a CBAM declaration relevant to “goods and origins” where a risk of abusive practices has been identified, “evidence demonstrating that the high risk of abusive practices has not materialised” must be included with the CBAM declaration, or else the importer must resort to default calculation values.

Relevant conditions and evidence are to be designed “in a proportionate manner” and “should not place any unnecessary burden on operators and importers.”

Effectively, this would give the Commission the authority to restrict certain CBAM products and origins to default values, with exempting evidence to be submitted by importers alongside the CBAM declaration, compounding importer uncertainties on a seemingly permanent basis.

Further provisions relate to powers of the Commission or competent authorities to request evidence from a CBAM declarant illustrating that imported CBAM goods were indeed produced in the installation and time period as declared by an importer – to address risks of mis-declared emissions – as well as introducing a new definition of circumvention relating to the artificial adjustment of supply chains to benefit from more competitive default emissions values.

The anti-circumvention package also makes mandatory that third country operators register within the CBAM registry if actual emissions values are to be used for importers’ subsequent verifications and declarations, where this was previously voluntary.

As an ultimate policing power, the act would also authorise the Commission to withdraw products or even entire sectors from the scope of CBAM where the instrument is found to be causing “severe harm to the Union internal market due to serious and unforeseen circumstances relating to the impact on the prices of goods”

Export Support – the ‘Temporary Decarbonisation Fund’

As a separate legislative proposal, independent of the act on circumvention and downstream extension, the Commission also holds it necessary to create a “Temporary Decarbonisation Fund,” to mitigate the “remaining risk of carbon leakage” as ETS free allocations are phased out at an increasing rate from 2026 to 2034.

The steel industry has primarily discussed the need for such provisions in reference to potential “export rebates” for their ETS-liable productions, to address domestic producers’ loss in global competitiveness in relation to exporting origins unencumbered by carbon pricing schemes in their own jurisdictions. CBAM aims to rebalance this loss of competitiveness at the border with imported steel, and so does little to aid the export competitiveness of EU producers.

The Fund is intended to support energy-intensive industries in their decarbonisation in the context of sustained carbon leakage pressures, with any financial grants “conditional on decarbonisation investments.”

Financed by member states (corresponding to 25% of respective member state revenues generated from the sale of CBAM certificates from 2027) the Fund will issue temporary financial support to energy-intensive producers over the period 2028-2029, determined on the basis of a 2026-2027 reference period. A single call will be issued for the fund in 2028, with applications to be submitted by 31 March of said year.

Proceeds from the fund will prioritise support for “operators of EU-ETS installations which produce goods exposed to the highest remaining risk of carbon leakage,” taking the carbon leakage list of the ETS (upon which iron and steel products widely feature) as a starting point.

The amount of financial support available will be calculated in reference to phased-out free allocations, adjusted to a relevant operator’s production share, and multiplied by average EUA prices 2026-2027. The Commission will then decide on the disbursement of calculated funds

Domestic producers of the goods in appendix II of this article are eligible for fund proceeds, though member states can petition for the inclusion of non-listed CN codes where carbon leakage risks have not been preliminarily identified by the Commission.

Carbon Price Already Paid

Finally – and among other more administrative provisions – the acts give some additional clarity into how ‘carbon prices already paid’ will operate as a deduction from the total CBAM liability.

The legislation makes provision for verifiers of actual emissions to possibly extend their verification functions to certification of carbon prices already paid, with similar accreditation requirements to be introduced by the Commission as for emissions verifications.

Beyond that, the acts authorise the Commission to pass implementing acts detailing the requirements to claim carbon prices already paid – using either actual or default carbon prices – and suggest that international carbon credits under Article 6 of the Paris Agreement could be recognised for relevant deductions.

European hot-rolled coil market remained quiet on Tuesday December 16 amid trading standstill and looming policy updates. Some suppliers target higher prices for the first quarter delivery, Fastmarkets heard.

Leading European steelmaker ArcelorMittal was heard to be largely sold out for February delivery HRC. For March delivery, the company has raised its HRC offers by €20 per tonne to €670 per tonne base delivered (or ex-works), depending on the region, Fastmarkets heard on Tuesday.

A steelmaker from Benelux reported plans to target €650 per tonne ex-works for March delivery coils.

Price ideas from customers in Northern Europe came at €610-630 per tonne ex-works, but trading was thin lately.

“HRC prices are moving up step by step — however only due to uncertainty with new imports due to CBAM and new safeguards,” a buyer in Germany said.

“Prices [for HRC] are very fragile, there is no support from demand side; restocking will be minimal,” a second buyer said.

As a result, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Northern Europe was €623.54 per tonne on Tuesday, up by €1.87 per tonne from €621.67 per tonne on Monday December 15.

The index was up by €0.73 per tonne week on week and up by €10.62 per tonne month on month.

Meanwhile, in Italy, Fastmarkets’ daily steel hot-rolled coil index domestic, exw Italy was calculated at €613.33 per tonne on Tuesday, up by €1.66 per tonne from €611.67 per tonne on Monday.

The index was down by €0.42 per tonne week on week, but up by €12.08 per tonne month on month.

Trading was almost nonexistent in Italy, sources said. Similarly to the situation in northern Europe, local distributors held sufficient stocks, while local mills had good order books.

Offers for February delivery HRC were heard at €610-640 per tonne ex-works, depending on supplier.

Buyers estimated achievable prices at €600-620 per tonne ex-works. Although, one source pointed out that “it was no longer possible to buy HRC below €610 per tonne ex-works in Italy.”

Meanwhile, market participants said interest in new import bookings remained muted, weighed down by the EU’s upcoming CBAM requirements, the transition to a new trade regime and uncertainty over the remaining quota volumes available under the current safeguard system.

“Buying imports on CFR basis is no longer possible. Only viable option is DDP-based bookings, at least partially accounted for CBAM costs — a few big traders offer that option,” Italina buyer said. “Small buyers just withdrawn from the market because they can’t manage CBAM costs complexity,” they added.

Algerian coil was offered in Italy at €610 per tonne DDP. Offers for Turkish HRC were heard at €620 per tonne DDP in Italy.

Leading European steelmaker ArcelorMittal has raised its offer prices for hot-rolled coil across Europe by another €20 ($23) per tonne for March delivery, Fastmarkets heard on Tuesday December 16.

Several sources familiar with the matter confirmed to Fastmarkets that ArcelorMittal had announced a price increase of €20 per tonne for March-delivery HRC, with new offers at €670 per tonne base delivered, compared with €650 per tonne base delivered for January/February delivery coil, announced in October.

As for downstream flat steel – cold-rolled coil and hot-dip galvanized coil – there was less traction in these segments compared with HRC, sources said.

The latest sales for HDG were reported at €760 per tonne base delivered in Northern Europe.

Some sources reported offers for March-delivery HDG from the supplier at €780 per tonne base delivered earlier this month. This was up by €30 per tonne compared to offers for HDG to be delivered in January and February, which were confirmed in October to be at €750 per tonne base delivered.

New offers have not been traded so far, but market sources noted that sentiment among other suppliers was becoming increasingly bullish, following the recent Carbon Border Adjustment Mechanism (CBAM) updates.

Sources pointed out that recent price increases achieved in the European flat steel market were driven entirely by shifting trade regulations – notably CBAM and new trade regime, while real demand remained sluggish.

“[Flat steel] prices are moving slowly upwards – however only due to fear of uncertain costs of CBAM and new safeguards and are not driven by demand,” a buyer source in Germany said.

“There are very few companies who can manage CBAM financially – therefore, import activities almost stalled recently. Reliance on domestic steel next year will be much bigger, imports is becoming unmanageable,” a buyer in Italy said.

In recent weeks, European HRC prices have been broadly stable, with distributors and stockholders holding sufficient inventories and holding back from trading, expecting more clarity about the new trade measures and CBAM, and postponing purchases.

Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe reflected the recent standstill in the market, trading within a range of €621-623 per tonne throughout the week to December 12. Minor day-to-day fluctuations marked a generally flat market, although month-on-month changes still indicated a modest upward trend.

Fastmarkets’ most recent calculation of daily steel HRC index domestic, exw Northern Europe was €621.67 per tonne on Monday, flat from December 12.

The index was down by €0.58 per tonne week on week but up by €8.75 per tonne month on month.

So far, tradable prices for HRC across Europe have remained below ArcelorMittal’s target offers – with recent trades in Northern Europe reported at €620-630 per tonne ex-works.

Looking ahead, sources said that in early 2026, following the full rollout of CBAM and the closure of remaining opportunities to secure competitively priced imports, higher prices might be accepted “in small steps,” Fastmarkets heard.

Volkswagen is halting on Tuesday car production at one of its plants in Germany, for the first time in its 88-year history, Kallanish notes. The production line in Dresden is the one affected.

The move comes at a time when Europe’s largest automaker is under immense pressure due to weak demand and sales in both China and Europe, as well as increased tariffs in the US.

Volkswagen is struggling to allocate its investment budget of around €160 billion ($187 billion) over the next five years and the company continues to look for ways to cut costs and boost operating profits.

The Dresden plant has produced fewer than 200,000 vehicles since it began production in 2002, less than half the annual output of the central Wolfsburg plant. The closure is part of a deal reached with unions last year that will also see VW cut 35,000 jobs in Germany.

The plant site will be leased to the Technical University of Dresden to create a research campus for the development of artificial intelligence, robotics and chips. VW has pledged to invest €50 million over the next seven years in the joint project with the university, while continuing to use the facility as a dealership for delivering cars to customers and as a tourist attraction.

Volkswagen is also preparing major changes to its development strategy. They should allow the company to maintain its focus on electrified models, make electric cars more affordable and have greater range.

That’s why VW’s future lineup in Europe and North America will be filled with cars organised according to the principle of a sequential hybrid. These are the so-called extended-range electric vehicles (EREVs), which are very popular in China but not yet widespread in Europe and North America.

Volkswagen reports that the adoption of electric vehicles (EVs) has been slower than expected, with the main reason cited as consumer concerns about the range of the vehicle. The EREV system addresses this issue.

Investments in such hybrids will be part of the new strategic plan for the next five years. This will be published in March 2026 and is expected to take into account the upcoming postponement of the entry into force of the EU’s internal combustion engine (ICE) ban. The EU is expected to announce changes to this policy on 16 December.

Earlier, German defence manufacturer Rheinmetall said it is considering taking over one of Volkswagen’s soon-to-be-unused plants, as the arms maker seeks additional production capacity in Germany while domestic carmakers struggle.

VW’s Osnabrück plant is one of three that will remain unused for the next two years after the automaker decided last December to halve its production capacity in the country due to slowing car sales in Europe.

The European Council has adopted its mandate to negotiate with the European Parliament on the new steel trade regime, with certain amendments introduced such as allowing unused quota carry-overs and reviewing the measure’s scope after 18 months.

The requirement for importers to provide evidence on the country of melt and pour will meanwhile apply from 1 October 2026, Kallanish notes.

The Council says it has incorporated Union interest as a guiding principle to ensure explicit consideration for all economic operators and final consumers.

Unused tariff quota volumes in one quarter will be permitted to be carried over to the next quarter within the same yearly period of application of the tariff rate quota. When amending quotas, policymakers will also need to consider potential substantial price increases seriously undermining the competitiveness of downstream industries.

The Commission can, via a delegated act, adjust tariff quota volumes, taking into account the EU interest and a series of elements. The Council clarified that the total value of these adjusted quotas must be capped to remain between 15.2 and 22.2 million tonnes.

The melt and pour implementation date will meanwhile provide a transition period for industry and customs agencies to adjust to the new rule, the Council notes.

Within two years, the Commission will have to assess whether to designate the country of melt-and-pour as the basis for country-specific tariff quota allocations. If the Commission concludes it is necessary to do so, it will present a new legislative proposal to that effect.

As for the scope review after 18 months, the Commission will launch a consultation process to this end with relevant stakeholder by 1 October 2026.

The period for the first overall review of the regulation’s effects on the steel market and the EU interest has been shortened to four years from the date of entry into force, with subsequent evaluations every two years thereafter. Council also added further attention in the review for the impacts on downstream industries.

A new provision also requires the Commission to make an online contact point available for EU economic operators to request relevant information concerning the implementation of this regulation.

Once the European Parliament adopts its position, the co-legislators will start negotiations with a view to finalising the work on the text. The European Parliament’s Committee on International Trade (INTA) is likely to vote on the amended proposal in January before there is a vote in plenary (see Kallanish passim). The regulation will enter into force once adopted by both institutions and published in the official journal.

Commission negotiations with WTO members and FTA partners on access to the EU steel market are understood to require a separate mandate, which is yet to be provided by the Council.

Rebar prices from German mills have moved up only minimally in recent weeks, with wire mesh seeing the same fate.

A manager of a bender firm reports market talk that prices for wire rod have recovered somewhat since November, which could feed through to wire mesh pricing. At present, delivered prices of wire mesh are at around €60/tonne ($70) above rebar, Kallanish learns from buyers.

For rebar, base price offers now stand at €340/t. When adding the standard size extra of €265, this would result in a delivered price of €605/t. The base price for wire mesh is €100 higher, at €440/t, which plus an average surcharge of €212 would give a delivered price of €662/t, another manager specifies.

He does not believe that wire mesh will see a stronger upward momentum than rebar, mainly because wire mesh is typically used in construction of smaller residential units, a segment in which activity is particularly sluggish.

One extraordinary factor is the increase that occurred in late summer of size extras for rebar at one particular mill, Badische Stahlwerke. According to the manager, Badische also meant to bring up the surcharges for wire mesh. While they more or less succeeded with rebar, they did not work with wire mesh, he says.

Also, the only mill to follow Badische’s example was Austria’s Marienhütte. Other mills have not shown attempts to follow suit, “and they will not anytime soon”, the manager predicts.