EU to Strengthen Trade Defence with Steel Action Plan

EU

New Safeguard Measures to Protect EU Steel Industry

The European Commission has unveiled its Steel and Metals Action Plan, aiming to tighten trade defence through a tariff-based safeguard system and "melt and pour" rules for steel imports. This initiative seeks to address growing concerns over global overcapacities and unfair trade practices.

An official document published on March 19 outlines a series of measures to support the European steel industry. These include revisions to existing safeguard measures, assessments of new trade defence instruments, and an evaluation of the Carbon Border Adjustment Mechanism (CBAM) to prevent circumvention.

Steel Industry Leaders React

Eurofer president Henrik Adam welcomed the plan, stating, “We are grateful that the Commission has clearly recognised the strategic importance of the European steel industry.” However, industry experts argue that the proposed safeguard revisions fall short of Eurofer’s earlier demand for a 50% reduction in tariff-rate quotas.

MEPS steel market analyst Jon Carruthers-Green noted, “The European Commission aims to balance the interests of the domestic steel industry and end-users, though this frequently results in neither group being fully satisfied. That said, today’s announcement will likely be welcomed by steel industry participants, as it confirms the Commission’s commitment to ongoing protection beyond the expiration of steel safeguards.”

The plan highlights that since 2017, EU steel output has declined from 160 million tonnes to 126 million tonnes in 2023. The industry’s current capacity utilization rate of 65% is deemed unsustainable, prompting the need for stronger trade measures.

New Trade Defence Measures and Circular Economy Initiatives

The Steel Action Plan indicates that a replacement for the current import safeguard measures—set to expire in June 2026—will be proposed by Q3 2024. Additionally, while no firm commitment has been made, the European Commission will assess the introduction of a “melt and pour” rule to prevent circumvention of trade defence measures through transhipment.

The plan also includes strategies to ensure sufficient availability of scrap within the EU, addressing concerns over increased ferrous scrap exports. Exports surged to 19.43 million tonnes in 2021, accounting for 20% of the EU’s total scrap generation. A potential trade measure to regulate scrap exports could be implemented by Q3 2025.

Furthermore, the Commission will establish new standards for recycled content in steel-dependent sectors as part of its circular economy push. A feasibility study on the impact of these measures is expected to be completed by the end of 2026.

Eurofer’s Henrik Adam emphasized, “From addressing unfair trade to closing loopholes in the Carbon Border Adjustment Mechanism to recognising the strategic and environmental value of steel scrap, the Action Plan identifies crucial areas for our sector. Now it’s time to implement meaningful solutions through ambitious measures.”