A new leaked draft of the IIA relaxes the "Made in the EU" rules and opens the door to steel imports in government procurement
The latest published draft EU Law on Production Acceleration (IIA) introduces significant changes to the "Made in the EU" procurement rules, allowing individual third countries to be equated with EU producers in public procurement of strategic industrial goods, including steel, Fastmarkets reported on Thursday, February 12.
This change marks a marked softening of previous proposals outlined in the first published draft of the IIA, and was widely seen as reflecting the concerns of some EU member states about overly stringent requirements for origin from the Union, which could disrupt supply chains and create trade tensions.
.The revised text retains the definition of "origin from the Union", covering production in the EU and the European Economic Area (EEA), but adds a mechanism allowing the European Commission to identify specific third countries as equivalent through delegated actions.
To qualify, countries must demonstrate mutual international obligations to the EU and contribute to achieving the Union's goals in the areas of competitiveness, sustainability and economic security, according to a draft document reviewed by Fastmarkets.
The Commission will also be able to revoke this status in case of serious violations.
This provision applies to energy-intensive industrial products and zero-energy production technologies listed in Annex II, which has not yet been published but is expected to include steel.
The addition of equivalence in a third country highlights an important change, which is that the IIA is no longer seen solely as a decarbonization tool "Made in the EU" as Fastmarkets understands it.
Changes could still be made to the draft IIA before it was officially approved, and it is expected that the final version will be published on February 25.
Implications for the steel market
An earlier draft provided for a mandatory combination of requirements for the production of European-origin steel and low-carbon products in government procurement and government assistance plans, which actually promoted the production of low-emission steel in the country.
The new draft was less prescriptive, allowing member States to apply either criteria of origin from the Union, low-carbon criteria, or both.
As for steel, this reduces the risk of introducing a strict system of "double requirements", which, as industry sources warned, could lead to supply disruptions.
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