The European Council has formally adopted the EU’s new steel trade defence framework, which will apply from 1 July and replace the current steel safeguard measure. This aims to protect the bloc’s steel industry from persistent global overcapacity, Kallanish notes.
The European Parliament plenary voted in favour of the regulation last month.
The regulation introduces a revised tariff-rate quota (TRQ) system, including reduced import quotas and higher duties on imports exceeding those quotas. It also incorporates a “melt and pour” requirement to improve transparency and help prevent circumvention by identifying the country where steel was first melted and poured.
The framework includes a strengthened review mechanism, allowing the European Commission to assess the scope and effectiveness of the measure and propose adjustments in response to market developments and evolving global overcapacity conditions. Unused quotas may be carried over from one quarter to the next during the first year, “ensuring adequate supply for downstream industries and maintaining compatibility with the EU’s international trade obligations”, the Council says.
Global steel overcapacity is projected to reach 721 million tonnes by 2027, more than five times the annual EU steel consumption. “This overcapacity, combined with trade-restrictive measures from third countries that limit imports into their markets, has made the EU market the primary recipient of global excess steel. This has led to increasing imports, low-capacity utilisation (67% in 2024), high EU manufacturing costs, and ultimately threatens the industry’s long-term ability to invest in decarbonisation,” the Council writes in a statement.
“Steel is indispensable to Europe’s industrial base, its green transition and its security. With today’s adoption, the EU is putting in place a stronger framework to respond to global market distortions, protect fair competition and provide greater certainty for both steel producers and downstream industries,” says Michael Damianos, Minister for Energy, Commerce and Industry of Cyprus, which currently holds the six-month rotating Council presidency.
In a joint declaration accompanying the regulation, the Council, European Parliament and Commission reaffirmed their commitment to reducing economic dependencies on Russia through the gradual phase-out of Russian steel products and continued diversification of steel imports.
Meanwhile, last week, the European Commission launched a four-week melt-and-pour consultation, from 4 June to 2 July.
