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EU steel decision sparks division: protection or obstruction?

The European Commission’s proposed regulation to “Address the Impact of Global Overcapacity on the EU Steel Market” has sparked differing opinions.

EU steel decision sparks division: protection or obstruction?

The European Commission (EC) presented a proposal on October 7 aimed at protecting the EU steel industry. While the proposal was welcomed by European steel producers, it raised concerns among the bloc’s trading partners.

The Commission’s proposal included the following measures:

  • Limiting duty-free import volumes to 18.3 million tons per year;

  • Raising the customs duty rate on products exceeding that quota to 50%;

  • Strengthening traceability in steel markets by introducing a rule that records steel volumes based on the country where they were melted.

Voices of Support from the Industry

One of the supporters, Outokumpu, described the decision as a crucial step toward protecting Europe’s industrial base, ensuring economic stability, and advancing the green transition. The company stated that the TRQ mechanism is the most suitable and effective tool to shield the EU steel industry from the effects of global overcapacity.
It added that the proposed restrictions would prevent aggressive export surges, reduce circumvention risks, and ensure a fair balance for all operators in the European value chain. Furthermore, the non-transferability of unused quotas would help maintain market stability by preventing short-term import spikes.

The Spanish Steel Association (UNESID) also welcomed the proposal for similar reasons and called for its swift adoption so that the measures could enter into force at the beginning of 2026. UNESID representative Hermoso said that the measure offers an opportunity to restore the competitiveness of European steel and strengthen its role as a cornerstone of Europe’s economic, industrial, and environmental development.

Maria Rippel, Managing Director of the German Steel Federation (Wirtschaftsvereinigung Stahl), emphasized that the quick response from the strategic dialogue with Commission President Ursula von der Leyen 14 days earlier to the publication of the plan showed Brussels had grasped the seriousness of the situation. She also referred to necessary adjustments regarding the CBAM, noting that the mechanism aims to protect Europe’s energy-intensive steel sector from carbon leakage and should be extended to downstream products in the value chain.

EUROFER also expressed its support through its Director General, Axel Eggert, who stated: “This is an important step in defending the sector and clear evidence that the Steel Strategic Dialogue initiated by President von der Leyen is starting to bear fruit.”

Criticism and Concerns Rise

However, not all stakeholders view the decision in the same light.
ASSOFERMET, one of Italy’s leading industry associations, criticized the proposed regulation as creating “a steel vise for all distributors and processing companies,” arguing that such measures would seriously weaken Europe’s manufacturing industry in the name of protecting the EU steel sector.
The association strongly opposed the proposal, saying it directly threatens the economic interests of the EU manufacturing sector, which depends on stable supply chains and reliable steel suppliers.

Other key industry groups such as UK Steel, the European Automobile ManufacturersAssociation (ACEA), and the German Mechanical Engineering Industry Association (VDMA) also voiced opposition. Gareth Stace, Director General of UK Steel, warned: “This is perhaps the biggest crisis the UK steel sector has ever faced. The government must use our trade relationship with the European Union to secure UK country quotas, or we may face a potential disaster.”

ACEA added:“European steel is undergoing a decarbonization transition, and there are many challenges in maintaining our industry’s competitiveness. We do not dispute the need for a certain level of protection for a commodity like steel; however, the parameters proposed by the Commission go too far in shielding the European market. A better balance must be found between European steel producers and users.”

Thilio Brodtmann, Executive Director of VDMA, said that while they support the goal of minimizing dependency on China in the steel sector, the implementation of these measures should also consider their potential impact on costs within Europe’s value-added networks.

The Commission’s proposal will continue to be discussed among European institutions and industry representatives in the coming weeks.
The final decision is expected to affect not only steel trade but also Europe’s economic resilience and the direction of its industrial strategy.

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