Turkish steelmakers must remain alert and adaptive to an EU trade landscape that is rapidly evolving and aiming to achieve sustainability and fair competition. This includes new carbon regulations, evolving trade defence instruments (TDIs), and tighter origin rules, according to Van Bael & Bellis trade law expert Fabrizio Di Gianni.
The EU’s Clean Industrial Deal (CID) aims to make decarbonisation economically viable, targeting energy-intensive sectors like steel. Central to this initiative is the Carbon Border Adjustment Mechanism (CBAM), which will replace free allowances under the EU Emissions Trading Scheme (ETS) starting in 2026.
CBAM will impose carbon costs on imports into the EU, increasing the cost burden on carbon-intensive products while targeting practices such as product modifications and carbon “greenwashing”, Di Gianni said at this week’s EUROMETAL Steel Day and 10th YISAD Flat Steel Conference in Istanbul attended by Kallanish.
A full CBAM review is expected in the second half of 2025, which may expand the mechanism’s coverage and ease administrative burdens for small and medium-sized firms, while still accounting for over 99% of emissions.
The CID also includes a Steel and Metals Action Plan focused on six pillars, including carbon leakage prevention, innovation, and competitiveness. Alongside CBAM, the EU is ramping up trade defence enforcement – intensifying market surveillance and preparing to launch AD/CVD investigations based on potential injury, rather than proven harm. A revision of the Lesser Duty Rule is also on the table, potentially enabling higher tariffs, Di Gianni noted.
Additionally, safeguard measures have been tightened, significantly affecting Turkish exports, particularly in high-impact product categories like 1A (hot rolled coil) and 5 (organic coated steel).
Among the most significant developments are proposed changes to origin rules. Traditionally, origin has been determined based on the last substantial transformation of a product. However, the EU is now considering a shift to a “melted and poured” regime, where the origin would be linked to the initial smelting location.
For example, Chinese-origin HRC processed into final goods in Turkey could still be classified as Chinese for TDI purposes. This would undermine traditional global value chains and poses serious challenges for Turkish steel processors, Di Gianni commented.
He also emphasised the EU’s staged sanctions framework means steel products processed from Russian materials face growing restrictions. Turkish companies must carry out enhanced due diligence in sourcing and exports to avoid becoming involved – knowingly or unknowingly – in activities considered circumvention under EU sanctions legislation.
As of 1 April 2024, imports into the EU are banned if Russian-origin billet has been transformed into steel rod (HS 7215) and then into steel wire (HS 7223). From 1 October 2028, the ban will extend to HRC of alloy steel (HS 7225 and 7226) and steel tubes (HS 7306) processed from Russian slab.
However, not all forms are covered. Russian-origin pig iron transformed in Turkey from slab is currently exempt and may still be imported.
These sanctions bring additional compliance risks for Turkish companies, particularly related to inadvertent circumvention via transshipment or supply chain diversion, Di Gianni noted.
Restrictions on scrap exports are also under consideration by the EU, which could limit third-country access to EU scrap.
