Europe’s ‘melted and poured’ rules on steel will be made clear by September: Van Bael & Bellis
Speaking at the Eurometal Steel Day and the 10th YISAD Flat Steel Conference in Istanbul on Tuesday April 8, Di Gianni detailed the recent regulations introduced by the European Commission.
The Commission intends to tighten current steel trade defense measures, improve regulations for the prevention of carbon leakage and provide affordable clean energy to support the steel industry, according to a draft version of the European Steel and Metals Action Plan.
One of the most important points in the plan is the ‘melted and poured’ rule, which basically will mean that the Commission will be able to trace the origin of steel exported into Europe.
For example, if hot-rolled coil is exported to Europe from Turkey but the slab used to produce the HRC was from China, the Commission may impose the import duty for slab of Chinese origin. The exporters and buyers will be required to trace the production origin of the end-materials.
Such investigations into the origin may go back retrospectively by three years, Di Gianni said in his presentation to the conference.
Conference delegate Ahmet Soybaş, partner at Soybaş Steel, asked how the origin of hot-dipped galvanized coil would be traced.
For instance, a galvanizer may buy Turkish HRC, galvanize it, and then export it to Europe. The end-producer cannot know the origin of the slab, Soybaş said, because it bought HRC as substrate. Di Gianni said that the European Commission would investigate why the galvanizing was done in Turkey. “Was it in order to [avoid] duties on Chinese HDG? That is the question the Commission will ask,” Di Gianni said.
Tayfun İşeri, coordinator at Colakoglu Metallurgy, asked how end-users such as automotive exporters would know the location of melting. “How will this be traceable?” he asked.
He also said that if a producer used locally produced slab to make HRC for export to Europe, and then used imported slab for HRC to be consumed locally, how would the Commission be able to know the difference in the final materials?
Di Gianni said that details on all these points were not clear yet but the Commission was expected to announce details by the end of the third quarter of 2025.
He added that the Commission was also planning to impose limits on scrap exports from Europe by September.
EU action plan confirms melted/poured, CBAM, scrap focus
The European Commission published its Steel and Metals Action Plan on Wednesday, confirming it is evaluating the “melted and poured” rule, adjustments to the Carbon Border Adjustment Mechanism (CBAM) and a scrap export duty.
However, its wording on various points softened compared with the Plan draft leaked earlier in the week, Kallanish notes.
European steelmakers association Eurofer praised the Commission’s proposals but warns that “energy remains the elephant in the room” and that “further work to reduce energy costs is crucial”.
The final Plan states the Commission “will assess whether it should adapt its practice by introducing a ‘melted and poured rule’.” This compares to the draft, which stated the Commission has already decided to implement the rule in its trade defence measures. No schedule has been provided for the assessment process.
The Commission says it will “consider proposing”, by the third quarter at the latest, export fees or export duties, “if necessary”, to ensure sufficient availability of scrap in the EU. It will also assess introducing a reciprocity rule to countries that ban scrap exports to the EU or apply unfair subsidies to support their metal recycling industries.
The draft language was firmer, indicating the Commission would propose a reciprocation measure by Q3.
The Commission’s CBAM adjustments proposed in the draft have all made the cut. The difference is the timing for one of them. The Commission will issue in Q2 a communication providing analysis and options on how to address the problem of carbon leakage for CBAM goods exported from the EU to third countries.
The Commission also confirms it will strengthen the monitoring of trade flows and will proactively open investigations based on a “threat of injury”, without waiting for material injury to occur.
On energy, in the short term, the Commission is encouraging member states to use existing regulation that allows for reduction of environmental taxes and parafiscal levies, and reduction of electricity levies. The Energy Taxation Directive allows to decrease electricity taxation to zero for energy intensive industries.
The Commission is consulting member states on a clean flexibility state aid instrument based on PPAs and industry committing to consume clean electricity. It will also provide guidance to member states on the design of public support schemes for clean energy through two-way contracts for difference. This will provide temporary price relief to enable decarbonisation investments, the Commission points out.
On lead markets for steel, as announced in the Clean Industrial Deal, the Commission will propose as part of the Industrial Decarbonisation Accelerator Act to introduce resilience and sustainability criteria to foster clean European supply for energy-intensive sectors. These criteria – for example, clean, resilient, circular, cybersecure – will strengthen demand for EU-made clean products.
Finally, the Commission made the link between steel and defence, saying the former is “crucial” to guaranteeing the EU’s security and delivering on the ReArm Europe Plan/Readiness 2030 programme, also launched on Wednesday.
Adam Smith Poland
