Commission proposes plan to protect EU steel industry from unfair impacts of global overcapacity
The Commission has presented a proposal to protect the EU steel sector from unfair impacts of global overcapacity, a vital step towards ensuring the long-term viability of a strategically crucial industry. Delivering on the commitments set out in the EU Steel and Metal Action Plan, the proposal maintains the principle of open trade and strengthens engagement with global partners to tackle overcapacity, by:
limiting tariff-free import volumes to 18.3 million tons a year (a reduction of 47% compared to 2024 steel quotas),
doubling the level of out-of-quota duty to 50% (compared to the 25% under the safeguard) and
strengthening the traceability of steel markets by introducing a Melt and Pour requirement to prevent circumvention.
European Commission President Ursula von der Leyen said: “A strong, decarbonised steel sector is vital for the European Union’s competitiveness, economic security and strategic autonomy. Global overcapacity is damaging our industry. We need to act now – I urge the Council and Parliament to move ahead quickly. The Commission will continue working with industry to protect and create good jobs, and with Member States and global partners – including at WTO level – to find long-term solutions to shared challenges.’
The proposal will replace the steel safeguard measure that is set to expire by June 2026. It responds to the call from EU workers, industry, several Member States, Members of the European Parliament, and stakeholders to offer strong and permanent protection to the EU steel industry, with a view to safeguarding EU jobs, and supporting the sector in its decarbonisation efforts.
Steel overcapacity is a global problem that requires strong, genuine and joint action by all partners. The Commission will continue leading international work on finding collective solutions to effectively tackle the root causes of global overcapacity, including in the framework of the Global Forum on Steel Excess Capacity. With its proposed measure, the Commission invites like-minded countries to work together with a view to ring-fencing their economies from global overcapacity while securing supply chains and increasing mutual market access.
The proposed measure is fully WTO compliant. Upon receipt of a mandate from the Council, the Commission will swiftly engage with affected EU trading partners under the Article XXVIII GATT procedure regarding this change to the EU’s WTO tariffs, with a view to offering them country specific allocations.
In view of the close and unique integration into the EU’s internal market under the EEA Agreement, exports from Norway, Iceland, and Liechtenstein will not be subject to tariff quotas or duties. Separately, interests of a candidate country facing an exceptional and immediate security situation, such as Ukraine, should also be reflected upon when deciding on the quota allocations, without undermining the effectiveness of the measure.
Next steps
The Commission’s proposal will now be subject to the ordinary legislative procedure, thus it will be for the European Parliament and the Council to agree on the final regulation.
The Council Decision authorising the opening of negotiations will need a qualified majority in the Council to be adopted.
Once adopted by the Council and Parliament, the measure will replace the EU’s safeguard on steel, when it expires in June 2026. By tabling today, the Commission is wants to ensure uninterrupted protection of the EU steel sector.
Background
Steel is an essential material for the EU economy, including for its green transition, due to its use in a plethora of strategically important sectors including defence. The EU steelmaking industry is the world’s third largest steel producer. It employs around 300,000 people directly and supports some 2.5 million jobs indirectly, with steel production sites across more than 20 EU Member States. Steel plants sustain many regional economies, underlining their socio-economic and political importance.
The EU steel industry is currently facing significant pressure from unsustainable levels of global overcapacity, which is more than five times the EU’s annual steel consumption (currently 620 million tons and projected to grow to 721 million tons by 2027). This increasing overcapacity, increasing imports of steel and closing of third country markets add to the internal challenges faced by the EU steel industry. These include an increase of trade-restrictive measures across third countries, high energy and manufacturing costs in the EU, and lower internal demand. These challenges unduly weaken the EU industry’s competitiveness in a global market, undermining the industry’s ability to invest notably in decarbonisation and threatening its long-term viability.
The EU steel industry is the only major region that has lost some 65 million tons of capacity since 2007. In 2024, the capacity utilisation rate reached 67% [healthy rates are around 80%] and some 9,000-100,000 jobs have been lost since 2007. The sector recorded record losses in 2024.
In light of these critical challenges, the Commission announced its intention to prepare a new steel measure in its Steel and Metals Action Plan (SMAP) of March 2025, with President von der Leyen reiterating the EU’s commitment to protecting its steel industry in her State of the European Union (SOTEU) address.
The proposed measure is based on an economic analysis, including an assessment of the potential impacts of various options, as well as insights gathered through a targeted consultation of sectoral stakeholders which took place over the summer. Many of the over 500 respondents, both across the industry (producers and users) and across EU Member States, were strongly supportive of a measure which significantly reduces the volume of tariff quotas on steel applicable against all origins, with a high out-of-quota duty level which they see as necessary to preserve a strong and sustainable steel industry in the EU. The economic analysis and a summary of the results of the stakeholder consultation are presented in a Staff Working Document accompanying the proposal.
For More Information
Proposed Measure on Steel
Staff Working Document
Recommendation for a Council decision authorising the opening of negotiations
Questions and Answers
Quote(s)
A strong, decarbonised steel sector is vital for the European Union’s competitiveness, economic security and strategic autonomy. Global overcapacity is damaging our industry. We need to act now – I urge the Council and Parliament to move ahead quickly. The Commission will continue working with industry to protect and create good jobs, and with Member States and global partners – including at WTO level – to find long-term solutions to shared challenges.
Ursula von der Leyen, President of the European Commission
An industrial future for Europe is impossible without a vibrant and resilient steel industry. By protecting our market from unfair global competition, we are building a path for a sovereign decarbonized European steel. This proposal is the first step for our industry to regain competitiveness. We now have to focus our efforts on the other parts of the action plan: CBAM reform, Clean industrial deal and demand measures. That is why I call on the co-legislators for an urgent and swift adoption of the proposal so our industry can invest, grow, and innovate.
Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy
EU trade is about fair, rules-based competition, and this measure will help our steel industry compete fairly amid increasing global overcapacity. I look forward to opening consultations and negotiations with the EU’s key trading partners in this sector through the WTO rules-based process. Ultimately, the EU remains committed to working with all willing partners towards a collective response to the challenge of global overcapacity. I will be further discussing this later in the week with key trading partners at the Ministerial meeting of the Global Forum on Steel Excess Capacity on 10 October.