The Cyprus Presidency of the Council of the EU and the European Parliament have reached a provisional agreement late on Monday on a new regulation aimed at tackling the negative effects of global overcapacity on the EU steel market.
The regulation introduces an updated framework to shield Europe’s steel industry from trade diversion and excess global supply, while remaining compliant with the EU’s international trade obligations and flexible for businesses, including downstream industries. It will replace the current safeguard measures set to expire on 30 June 2026, ensuring continued protection without regulatory gaps.
According to the European Commission, the initiative addresses global steel overcapacity, projected to reach 721 million tonnes by 2027, meaning more than five times the EU’s annual consumption while safeguarding around 2.5 million jobs and supporting the bloc’s decarbonisation goals.
The agreement provides for tariff-free quotas of 18.3 million tonnes annually and a 50% duty on imports exceeding those limits, covering 30 steel product categories. It also introduces the “melt & pour” requirement to enhance traceability in the supply chain. The measure will apply to imports from all countries, except EEA members, which will still be subject to traceability rules.
Cyprus Minister for Energy, Commerce and Industry, Michael Damianos, has stated that “the European steel industry is a strategic sector for our economy, our security and our green transition,” adding that the agreement equips the EU with a stronger, rules-based tool to address global overcapacity while ensuring fair competition and long-term resilience.
Bernd Lange, Chair of the European Parliament’s INTA Committee, described the deal as “a crucial step to protect the steel sector from unfair trade practices and support its global competitiveness and transition to climate neutrality.”
The agreement also foresees a revised tariff-rate quota (TRQ) system, reducing import quotas by about 47% compared to 2024 levels and allowing limited flexibility through the carry-over of unused quotas in the first year. From the second year, the Commission will assess whether such flexibility should continue based on market conditions.
Additional provisions include enhanced monitoring and review mechanisms, with the Commission set to reassess the scope of products within six and twelve months of entry into force. The EU also reaffirmed its intention to reduce dependence on Russian steel imports and diversify supply sources.
A joint declaration accompanying the regulation, marks the reaffirmation of co-legislators and the Commission to their commitment to reducing economic dependencies on Russia, emphasising ongoing efforts to diversify steel imports, with the gradual phase-out of Russian steel products.
The text agreed will now undergo formal adoption by the European Parliament and the Council in the coming weeks, with entry into force planned for 1 July 2026.
(Source: CNA)
