Orgalim, a company representing European technology industries, issued a strong warning against the recently proposed regulation of steel trade by the European Commission, arguing that this measure would lead to a serious increase in costs for manufacturers of secondary products.
The organization said that the draft regulation, submitted to counter global pressure on excess capacity in the steel sector, risks causing serious economic damage to the EU steel industries by limiting access to basic materials and increasing administrative and tariff burdens.
According to Orgalim, the new proposal is aimed at supporting steel producers in the EU, but will create a burden on small and medium-sized enterprises. The organization warned that this measure is being taken at a time when Europe's technology industries are already experiencing a downturn, including a 5.6% decrease in turnover, a 1.2% decrease in employment, and a 3.2% reduction in investment in 2024.
Orgalim noted that the existing steel protection measures in force since 2018 are already creating problems by limiting access to steel at competitive prices, limiting the availability of specialized grades and increasing administrative requirements for importers. These conditions have led to an increase in average iron and steel prices in the EU by more than 40% since the introduction of temporary protection measures.
Key elements of the new regulations
Orgalim described the proposed rules as "much more restrictive" than the current precautionary measures. It includes reducing the total volume of import quotas by 47 percent, doubling the tariff for exceeding quotas from 25 to 50 percent, and eliminating the mechanism for transferring unused quotas. The draft also introduces a mandatory requirement for verification of origin in "molten and spilled form", which, as Orgalim warns, will significantly increase the burden on importers related to documentation and compliance with legal requirements.
Cost impact: tariffs beyond quotas may increase by 1,200%
Orgalim's analysis shows that, taking into account the new measures, the annual cost of tariffs not related to quotas could amount to 5.4 billion euros, which is 660 percent more than the estimated 700 million euros paid in 2024. Under more realistic assumptions, such as that importers will be able to use only half of their quotas, costs could rise even further, to 9.3 billion euros, representing an increase of 1,200%.
The organization also predicted that reduced competition for imports would lead to an additional increase in domestic prices, further increasing costs for refineries.
