The European Federation for Distribution and Trade of Steel, Pipes and Metals (EUROMETAL) has sent a letter to the heads of EU decision-making bodies, including European Commission President Ursula von der Leyen, Executive Vice President Stefan Sedgerne and Commissioner Maros Sefcovic, warning that the growing import of steel derivatives is closing gaps in EU trade and carbon regulations.
Although these products are primarily made of steel, they are classified according to non-steel customs codes and therefore are not subject to instruments such as the Carbon Boundary Regulation Mechanism (CBAM), the EU Green Agreement and the closed-loop economy rules. This opened the way for cheaper imports of high-carbon products from countries with lower environmental and labor standards.
Market impact: production growth and distortion of the competitive environment
Steel derivatives cover a wide range of finished products and semi-finished products, including automotive parts, electrical equipment, prefabricated structures, industrial equipment and railway components.
Since 2010, imports of these goods have more than doubled, exceeding 8 million tons per year. Automotive components alone currently account for about 40 percent of total imports of derivative financial instruments. EUROMETAL said steel production in China, Turkey and Vietnam is subsidized, and that the EU mainly imports steel from these countries, where environmental regulations are less strict. This creates a competitive imbalance that disproportionately harms small and medium-sized enterprises (SMEs), a crucial segment of the European steel and manufacturing ecosystem, and damages strategic sectors such as renewable energy, electrification, mobility, defense, and infrastructure.
Closed-loop economics and strategic risks
The sharp increase in imports also has significant implications for Europe's closed-loop economy. The import of these derivatives displaces similar production in the EU, lowers prices and leads to the leakage of carbon dioxide. The steel included in these imports is often of high-carbon origin outside the EU and arrives without the ability to track carbon emissions or control from the trading system.
In 2024, the United States expanded Section 232 tariffs on more than 400 steel-derived products and introduced a mandatory "melt and pour" origin rule to track where steel was melted and cast. This has closed loopholes and limited the possibility of circumventing sanctions through third countries. As a result, the exporters
