Provisional Agreement on Steel Safeguard Regulation to Address Global Overcapacity

• Council of the EU
• Press release
• 13 April 2026 23:55

Council and European Parliament strike deal to protect EU’s steel industry from global overcapacity

Today, the Council presidency and the European Parliament have reached a provisional agreement on a regulation aimed at addressing the negative trade-related effects of global overcapacity on the EU steel market.

The regulation will introduce a new framework to protect the EU steel sector from global excess production and trade diversion, while ensuring that the measure remains compatible with the EU’s international trade obligations and sufficiently flexible for economic operators, including downstream industries. It will replace the current EU steel safeguard measures, which are due to expire on 30 June 2026, thereby ensuring continued protection for the EU’s steel market without regulatory gaps.

The new rules introduce a revised tariff-rate quota (TRQ) system designed to better address structural global overcapacity in the steel sector, including a significant reduction of import quotas and higher duties for imports exceeding those quotas.

The European steel industry is a strategic sector for our economy, our security and our green transition. Today’s agreement provides the EU with a stronger and more effective instrument to address global overcapacity while maintaining a rules-based approach and ensuring fair competition and long-term resilience for Europe’s steel producers and value chains.

Michael Damianos, minister for energy, commerce and industry of the Republic of Cyprus

Main elements of the agreement

The provisional agreement maintains the core architecture of the Commission proposal while introducing several adjustments reflecting the goal to address structural global steel overcapacity while safeguarding the stability of EU supply chains.

Tariff-rate quota system and carry-over

The regulation introduces a revised tariff-rate quota (TRQ) system governing steel imports into the EU.

The new system reduces the overall volume of steel import quotas by approximately 47% compared to the 2024 safeguard quotas (18.3 million tonnes of import volumes per year) and increases the out-of-quota duty to 50%. These measures are designed to discourage excessive imports while maintaining controlled market access for traditional suppliers.

The agreement also clarifies aspects related to the management of quotas and their allocation among exporting countries. The agreement provides that, during the first year of application, unused import quotas may be carried over from one quarter to the next for all product categories, in order to provide flexibility for economic operators and support supply chains .

From the second year onwards, the Commission will determine whether such quarterly carry-over should be allowed for specific product categories, based on certain criteria. These include factors such as the level of import pressure, the rate of quota utilisation and the availability of supply for downstream industries, with a view to preventing market disturbances while ensuring adequate supply.

'Melt and pour' requirement

To avoid circumvention and increase supply chain transparency, the regulation introduces provisions concerning the ' melt and pour' principle, which identifies the country where the steel was originally melted and poured – that is, the country where the steel was first produced in liquid form in a furnace and then cast into its first solid shape.

Under the compromise reached by the co-legislators, the country where the steel is melted and poured will be used as one of the factors when allocating quotas to third countries. This approach helps address global overcapacity while ensuring that the regulation remains compatible with existing trade rules, including rules of origin, and with the EU’s international commitments under the WTO and its free trade agreements.

Within 2 years, the Commission will have to assess whether to designate the country of melt and pour as the basis for country-specific tariff quota allocations and, if necessary, will present a new legislative proposal to that effect.

Product scope and review

The regulation maintains a product scope broadly aligned with the existing EU steel safeguard measures, ensuring legal certainty and administrative manageability. At the same time, the co-legislators have agreed on a reinforced and time-bound review mechanism:

• within six months of the entry into force of the regulation, the Commission will assess whether the scope should be extended to cover additional steel products, including tubes and pipes, certain types of wire and forged bars, and may propose legislative amendments where appropriate
• a second review will take place within 12 months, allowing the Commission to assess whether further adjustments are needed, in particular with regard to products made of or containing a significant amount of steel, in light of market developments and possible risks of circumvention. Consecutive scope reviews will take place every 2 years thereafter. The regulation introduces monitoring, reporting and review provisions to ensure that the instrument remains effective and proportionate over time. The Commission will regularly assess the functioning of the measure and may propose adjustments where necessary in response to market developments or evolving global overcapacity conditions.

Steel imports from Russia

In a joint declaration accompanying the regulation, the co-legislators and the Commission reaffirm their commitment to reducing economic dependencies on Russia, emphasising ongoing efforts to diversify steel imports, with the gradual phase-out of Russian steel products.

Next steps

The provisional agreement will now be submitted to the member states’ representatives in the Council and to the European Parliament for endorsement. Once formally adopted by both institutions, the regulation will apply as from 1 July 2026.

Background

Steel is an essential material for the EU economy, including for its green transition and strategically important sectors such as defence. The EU steelmaking industry is the world's third largest producer, directly employing around 300,000 people and sustaining regional economies across member states.

This key industry is currently facing significant pressure from unsustainable levels of global overcapacity, which is projected to grow to 721 million tonnes by 2027, more than five times the EU's annual consumption. This overcapacity, combined with trade-restrictive measures from third countries that limit imports into their markets, has made the EU market the primary recipient of global excess steel. This has led to increasing imports, low-capacity utilisation (67% in 2024), high EU manufacturing costs, and ultimately threatens the industry's long-term ability to invest in decarbonisation.

To address these critical challenges, including the loss of some 65 million tonnes of capacity and up to 100,000 jobs since 2007, the Commission announced its intention to prepare a new steel measure in March 2025.

• Steel overcapacity: Council adopts mandate on new rules to protect EU steel industry from global overcapacity (press release, 12 December 2025)
• Council mandate for negotiations with the European Parliament
• Commission’s proposal on the regulation
• European steel and metals action plan (European Commission

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