A leaked draft report from the European Parliament’s Committee on International Trade shows lawmakers preparing to back the European Commission’s plan for a 50% over-quota duty on steel imports, while allowing quarterly carry-over of quota volumes, Fastmarkets learned on Thursday November 27.
The draft text from November 24, which has not yet been adopted and remains subject to amendment, confirms that tariff-free steel import quotas would continue to be based on 2013 reference volumes, so about 50% below currently available allocation, with any out-of-quota shipments facing the sharply higher 50% duty, in line with the first draft, published on October 7.
Details on country-specific allocations – one of the most critical updates the market has been waiting for – have not yet been revealed.
Quota carryover proposed in draft
In contrast to existing safeguard rules, the leaked draft proposes allowing unused quarterly quotas to be carried over into the next quarter, a change industry participants said could ease volatility in certain product categories.
In the latest review of existing steel safeguards in March 2025, the carry-over of unused quarterly tariff-rate quotas (TRQs) into the next period for categories under significant import pressure was revealed, Fastmarkets reported.
In the new leaked draft, one of the suggested amendments read: “To ensure continuity and to avoid supply disruptions, carry-over of unused quarterly tariff quota volumes to the following quarter should be permitted. This would provide the necessary operational flexibility while maintaining the overall effectiveness of the measure.”
Stricter origin documentation, “melt and pour” requirement
The document reconfirms the Commission’s “melt and pour” origin verification requirement for all covered imports.
Notably, under the draft, the EU will require proof of the steel’s “melt and pour” origin – meaning the country where the steel was actually melted in a furnace and then cast into its first solid form. In particular, “solid form” refers to the steel’s initial shape after cooling, such as a slab, billet, ingot or any other early-stage block of steel.
In simple terms, it is the place where the steel first becomes a “solid piece”, before any later rolling, coating, cutting or other processing. The rule is intended to stop steel made in certain countries from being relabeled after minor processing elsewhere.
The draft also expands verification requirements by listing multiple forms of acceptable evidence, including mill certificates, invoices, delivery notes and long-term supplier declarations. The draft also calls on the Commission to develop guidelines to limit administrative burden, particularly for small and medium-sized enterprises.
Besides this, in one of the most significant additions, the Parliament text introduces a provision that would automatically prohibit all products made from steel melted and poured in Russia or Belarus, making such shipments ineligible for quota access and subject to immediate rejection at EU borders.
Exemptions
The draft also proposes that imports originating in Ukraine be fully exempt from both quotas and duties for as long as the country faces an “exceptional and immediate security situation,” i.e. Russia’s invasion of the region, extending the EU’s existing autonomous trade preferences.
Also, as in the Commission’s initial proposal, the draft confirms that Norway, Iceland and Liechtenstein would remain outside the quota and duty mechanism.
Scope reviews accelerated
While the Commission had suggested reviewing product coverage every two years, lawmakers propose annual scope reviews and annual public implementation reports detailing quota usage and volumes subject to the 50% duty. They also call for biennial evaluations of global overcapacity trends and impacts on EU steelmakers and downstream users.
The leaked text repeatedly stresses that the future instrument must remain fully WTO-consistent and be designed to address “trade distortions caused by global excess capacity,” with the long-term objective of restoring conditions for more open trade.
Next steps
Market participants stressed that the document is a draft parliamentary position and may change considerably before coming to a final vote. It must still pass through committee adoption, plenary approval and subsequent negotiations with the EU Council before entering into force.
However, several sources said the core elements of the proposal – including reduced TRQs and a 50% out-of-quota duty – are likely to remain intact.
If ultimately approved, the new system would replace the EU’s existing steel safeguard measures upon their expiry at the end of June 2026.
The exact date of the new trade regime coming into force still remains subject to debate.
European Steel Association Eurofer was lobbying for early introduction of the new regime.
In addition, earlier this year, several EU member states pushed for early termination of the current safeguard measures, urging that the new framework be introduced as early as the beginning of 2026.
Market sources, however, believe the deadline of January 1 is not realistic, since the draft needs to go through a “complex negotiations process” before entering into force.
“Procedures in the trilogue take quite some time,” a source in the EU steel market said.
Several market sources suggested that April 1 was a “feasible” deadline for adoption of the new trade regime, while the Commission declined to comment on the timeline.
In terms of market effects, sources expected the new trade regime to be even more disruptive than the impending Carbon Border Adjustment Mechanism (CBAM).
“The imports will be reduced by 50%. If the new regime comes into force as of April 1, this means the window to buy new imports without risks of facing a new 50% out-of-quota duty expires in January 2026, if not sooner. This consistent lack of clarity on CBAM and safeguards results in rumors driving the market – complete chaos,” a buyer source in Italy said.
