Orgalim, the association representing Europe’s technology industries, has published a detailed assessment warning that the European Commission’s proposed reform of the EU steel safeguard system could have severe consequences for downstream industrial users. In its paper, released on 14 November 2025, the organisation argues that the draft regulation risks becoming a “devastating threat” to the competitiveness of sectors that depend heavily on steel as a critical input.
According to the analysis, the Commission’s proposal introduces a far more restrictive safeguard regime than the one currently in place. The reduction of tariff-free quotas, the sharp increase in out-of-quota duties, and stricter origin-verification requirements would significantly raise costs for manufacturers across Europe. Orgalim notes that these changes come at a moment when technology industries are already experiencing their third consecutive year of economic decline, with falling turnover, reduced investment capacity, and growing pressure from global competitors. Companies that rely on specialised steel grades, many of which are produced outside the EU or only in limited quantities within Europe, would face particularly serious sourcing challenges.
The position paper highlights that the financial impact on steel users could be dramatic. Orgalim estimates that the proposed system could increase annual tariff costs to more than €5.4 billion—almost seven times higher than in 2024—and potentially even more if importers are unable to fully utilise their quotas. In addition to these direct costs, the organisation points out that trade measures implemented since 2018 have already contributed to domestic steel price increases of more than 40 percent. The new proposal, it argues, would further intensify this upward price trend, placing downstream manufacturers at a structural disadvantage compared with their international competitors.
Orgalim emphasises that the proposal does not adequately consider Europe’s broader industrial objectives. The EU’s commitment to reindustrialisation, resilient value chains, and decarbonisation relies on manufacturers having stable and affordable access to steel. By raising costs and limiting flexibility, the new safeguard regime risks triggering relocations of production away from the EU, reducing investment, and weakening innovation ecosystems. The paper also criticises the lack of a cumulative impact assessment, noting that the combined effect of the safeguard proposal, CBAM implementation, the phase-out of ETS free allowances, and upcoming sustainability requirements under the ESPR may be far more damaging than what has been evaluated so far.
You can read Orgalim’s full position paper here.
