The European Council has officially approved the new EU framework program for the protection of steel trade, which will enter into force on July 1 and replace the existing protective measures for steel. This is aimed at protecting the steel industry in the bloc from the ongoing global oversupply of production capacity, Kallanish notes.
The plenary session of the European Parliament voted for this resolution last month.
The resolution introduces a revised tariff quota system (TRQ), including a reduction in import quotas and an increase in duties on imports exceeding these quotas. It also includes a "melt and pour" requirement to increase transparency and help prevent circumvention of regulations by specifying the country where the steel was first smelted and bottled.
The framework program includes an enhanced verification mechanism that allows the European Commission to assess the scope and effectiveness of this measure and propose adjustments in response to market changes and changing global overcapacity conditions. Unused quotas can be shifted from one quarter to another during the first year, "ensuring adequate supplies for the processing industries and maintaining compliance with the EU's international trade obligations," the Council said in a statement.
Global excess steel production capacity is projected to reach 721 million tons by 2027, more than five times the annual steel consumption in the EU. "This excess of production capacity, combined with restrictive measures by third countries that restrict imports to their markets, has turned the EU market into the main recipient of the global steel surplus. This has led to increased imports, low capacity utilization (67% in 2024), high production costs in the EU, and ultimately threatens the industry's long-term ability to invest in decarbonization," the Council said in a statement.
"Steel is essential for Europe's industrial base, its transition to a green economy and its security. Today's adoption of the EU law creates a stronger foundation to respond to global market distortions and protect fair competition and provide greater certainty for both steel producers and processing industries," says Michael Damianos, Cyprus' Minister of Energy, Trade and Industry, who currently holds the rotating presidency of the Council for six years. months.
In a joint statement accompanying the resolution, the Council, the European Parliament and the Commission reaffirmed their commitment to reducing economic dependence on Russia by phasing out Russian steel products and further
