Bouwen met Staal: EC proposal to protect European steel industry poorly received by metal trade

On Tuesday 7 October, the European Commission presented a proposal for a European regulation to protect the steel industry in Europe from the “unfair” consequences of the prevailing global overcapacity. The plan, part of the EU Steel and Metal Action Plan, aims to create a stable market situation and equal, open trade options for the steel sector in Europe. However, the European association of independent metal distributors fears that it will have the opposite effect, writes Bouwen met Staal.

The proposal provides for a reduction in the tariff-free import volume for Europe to 18.3 million tonnes per year. That is approximately half the amount for 2024. The Commission wants to increase import duties outside this quota to 50 per cent. Under the current safeguard regime, this is 25 per cent. A so-called “Melt and Pour” requirement will also be introduced. This requirement is intended to prevent steel from reaching the European market via a detour.

European steel industry in dire straits

Global production capacity is now around five times greater than annual consumption in the European Union. At the same time, European manufacturers are facing increased energy and production costs, while demand for steel within the EU is declining. As a result, the steel industry in Europe has been under considerable pressure for several years. This is also evident from recent figures: since 2007, the capacity of the European steel industry has decreased by approximately 65 million tonnes and thousands of jobs have been lost.

Employers and employees in the sector and the national governments of the Member States have been calling for structural protection for some time. The Commission is responding to this with a proposal to replace the current safeguard measures, which expire in June next year.

‘EU trade is all about fair, rules-based competition. This measure will help our steel industry compete fairly in a market with growing overcapacity,’ explains European Commissioner Maroš Šefčovič.

‘Manufacturing industry disadvantaged’

According to Euranimi, the European association of independent metal distributors, the European manufacturing industry will be hit hard by the future regulation. The organisation predicts “exploding prices, structural shortages and a loss of competitiveness” for the manufacturing industry in Europe if the “basic” import quotas for steel are reduced by 50 per cent, the import duty outside those quotas is increased from 25 to 50 per cent, and the new CO2 tax under the CBAM (Carbon Border Adjustment Mechanism) comes into force. This tax is expected to apply from 1 January 2026 to steel and steel products manufactured outside the EU under less stringent climate standards than within the EU. Euranimi expects the tax to increase the price of imported steel by more than 10 per cent.

The distributors’ association foresees three harmful effects for European industry as a whole. The supply of steel in the EU will dwindle, while production capacity within the EU cannot be scaled up quickly (enough).

Mirror measure for steel end products

To prevent this doomsday scenario, Euranimi advocates a “mirror measure”: impose heavier safeguard measures on imported end products that are made entirely or largely from steel. Once the basic quota has been exceeded, end products consisting of more than 20 per cent steel would be subject to an import duty of 50 per cent on the value of the steel.

A washing machine, for example, typically consists of 60 per cent steel. If the basic quota is exceeded, this 60 per cent would then be subject to the 50 per cent levy. This would increase the price for the consumer by no more than 2 per cent, while European manufacturers would no longer be disadvantaged, Euranimi argues.

‘Protect the entire chain’

It is not only steelworks and their 300,000 jobs that deserve protection. Protect the entire value chain: forty times more people work there,’ suggests Euranimi board member Christophe Lagrange. ‘Otherwise, we will soon be producing European steel for a manufacturing industry that is now a mere shadow of its former self.’ His fellow board member Rob Greve agrees: ‘Protecting EU steel production is legitimate, but not at the expense of the processing industry. Otherwise, we will lose even more production, jobs and autonomy. A strong steel industry exists by virtue of a strong European market.’

According to the Commission, the proposal for the new regulation complies with the World Trade Organisation (WTO) rules on international trade. The Council of the European Union will now consider the proposal. Once the Council has given its approval, the EU will be able to determine the exact quotas per country in consultation with its trading partners outside the EU. The Council and the European Parliament must jointly approve the final proposal.

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Bouwen met Staal
Translated from Dutch
29 October 2025