European Commission publishes steel regulation without country quotas

The EU’s new steel trade regulation scheduled for 1 July implementation was published in the EU’s Official Journal on Wednesday, without the country-quota allocations. Since these remain under negotiation with trading partners, it is increasingly unlikely they will be finalised before 1 July, Kallanish notes.

Country-specific quota allocations are to be defined in a separate implementing act. Until that is in place, quotas would operate on a global basis, a material consideration for importers and supply chain planning, says Van Bael & Bellis trade lawyer Yuriy Rudyuk.

The regulation does however allow the Commission to adopt immediately applicable implementing acts under an urgency procedure to ensure tariff quotas are distributed by 1 July.

The new regime establishes annual tariff-rate quotas (TRQs) totalling 18.35 million tonnes and raises the out-of-quota duty to 50% from the previous 25%

It applies to imports from all countries, including free trade agreement partners and beneficiaries of preferential trade arrangements, with the exception of Norway, Iceland and Liechtenstein.

Under Article 5, allocations will not be based solely on historical trade shares. Besides the 2013 market shares and product-specific import patterns during 2022-2024, the Commission must also consider existing and future free trade agreements, trade-distorting measures by third countries, compliance with ILO and multilateral environmental agreements, international arrangements addressing global overcapacity, diversification of supply sources and the situation of EU candidate countries facing exceptional and immediate security challenges.

Information collected under the future melt-and-pour system will also be taken into account from October 2027.

A key element of the framework, the “melt and pour” principle, also remains to be specified. From 1 October 2026, importers will be required to provide verifiable evidence, such as mill test certificates (MTCs), identifying where steel or iron was initially produced in liquid form and cast into its first solid state.

However, the Commission has until 31 August to adopt implementing rules defining the acceptable proof, following consultations with stakeholders. By June 2028, it will assess whether eligibility for TRQs should be linked to the country of melt and pour in order to prevent circumvention through further processing in third countries.

The regulation also empowers the Commission to adjust the overall quota volume within a range of 14.4-22.2mt, depending on demand, developments in global overcapacity, supply availability, decarbonisation progress and defence considerations. Reviews of the product scope are also foreseen, including an assessment by June 2027 on extending coverage to downstream products containing significant amounts of steel.

Quotas will be administered on a quarterly basis, with unused volumes carried over to subsequent quarters only during the first year of application, from 1 July 2026 to 30 June 2027.

Source: Official Journal of the European Union

Author: Elina Virchenko

kallanish.com