The European Commission plans to unveil proposals for alternative steel safeguard measures in September this year, to replace the current measures which are due to expire on 30 June 2026, the Commission said in updates to its Clean Industrial Deal on 2 July.
The EU has already tightened the existing steel safeguard measures from April this year to protect the industry from a flood of imports diverted to the EU.
The steel industry requires protection from imports diverted to the EU from their usual outlet markets following the rise of Section 232 tariffs in the US and generally stricter trade policies in the country. In early June, the US authorities doubled tariffs on imported steel and aluminum to 50%.
Decarbonisation requires higher circularity, but scrap recycling in the EU has been on the decline due to a rise in export sales caused by higher prices outside the EU.
European mills have made plans to replace existing blast furnaces with less carbon intensive electric-arc furnaces (EAFs) as part of their decarbonisation route. EAFs use either ferrous scrap or direct-reduced iron as feedstock.
To learn more about the decarbonisation plans of EU steelmakers see McCloskey’s European Green Steel Profile.
The Commission has made data on scrap trade from the Customs Surveillance database publicly accessible as a part of a broader monitoring mechanism for imports and exports of non-ferrous goods and steel. This will help the adoption of new trade measures needed to ensure the sufficient availability of scrap in the EU.
European steel association Eurofer and European Aluminium association urged the Commission at the end of last year to take actions to tackle scrap leakage. The statement was met with criticism from the Bureau of International Recycling (BIR).
Steel exports under CBAM
EU industries remain exposed to unfair international competition, particularly as free allowances under the EU Emissions Trading System (EU ETS) will phase out from 2026 to 2034. Implementation of the Carbon Border Adjustment Mechanism (CBAM) will help prevent carbon leakage for imports, but exports from the EU would suffer as manufacturers in non-EU countries do not face similar carbon costs.
To tackle the risks related to exports, the Commission has proposed using the revenues generated by CBAM – which will be extended – to support production at risk of carbon leakage.
“This would allow the affected producers to be compensated proportionally to the phasing out of the free allowances subject to deliverables on long-term decarbonisation. The scope will need to be established based on objective criteria,” the Commission said.
The proposal will be put forward at the end of 2025 and will be subject to review in 2027.
At the same time the scope of CBAM was proposed to be expanded to downstream goods and introduction of anti-circumvention measures.
