(1)

The steel sector is central to the Union’s competitiveness and security. Steel is also essential for many other industries, such as the Union’s clean-tech, transport, building and energy infrastructure industries. Preserving a competitive and technologically advanced steel industry is therefore vital for the Union’s economic security. Accordingly, the Union considers the steel sector to be strategically important and is committed to ensuring its viability, resilience and long-term sustainability.

(2)

The Union has a longstanding tradition of steel production in towns and regions, where skills have been passed down through generations of steelworkers, who have played a key role in the foundation of Union manufacturing and are essential to sustaining the competitiveness and high social value of the steel sector.

(3)

Steel industries across countries and regions, including the Union, are suffering from the negative impact of increasing global structural excess capacity. That global challenge negatively affects the Union market and the markets of other countries either directly, through imports from countries with excess capacity, or indirectly, as a result of the ‘push-out’ effect, or in both ways. The effective resolution of global overcapacity requires enhanced joint efforts of the Union and like-minded partner countries which do not contribute to global overcapacity. The Union will therefore step up its efforts in leading the international work, including in the framework of the Global Forum on Steel Excess Capacity (GFSEC), on addressing the root causes of global overcapacity and implementing solutions which strengthen the transparency of the global steel market and take into consideration modern production and supply techniques, including through the application of the ‘melt and pour’ principle, as well as through the monitoring of imports and exports. The Union remains committed to keeping markets fair and open, and to further strengthening its relationship with existing and future free trade partners. In that spirit, and with a view to ring-fencing their economies from global overcapacity and increasing market access among them, the Union and like-minded countries should urgently work together, reflecting shared strategic interests and mutual benefits, while still ensuring secure, predictable and diversified supply chains.

(4)

An in-depth analysis concluded by the Commission in 2019 showed that the Union steel industry was already at that time in a situation of being at threat of serious injury, and that the situation was likely to develop into actual serious injury in the foreseeable future, in the absence of safeguard measures. The Commission concluded that it would be in the Union’s interest to adopt appropriate measures to avoid a further increase in imports of steel products.

(5)

On 31 January 2019, the Commission adopted Implementing Regulation (EU) 2019/159 (2) imposing definitive safeguard measures on certain steel imports, thereby addressing the risk of trade diversion and the threat of serious injury that would likely have followed for the products covered by that Regulation. Implementing Regulation (EU) 2019/159 is due to expire on 30 June 2026.

(6)

In November 2024, Union leaders adopted the Budapest Declaration on the New European Competitiveness Deal, highlighting the urgent need, and their determination, to make the Union more competitive. Furthermore, Union leaders declared their commitment to ensuring industrial renewal and decarbonisation, and to allowing the Union to remain an industrial and technological powerhouse that fosters quality jobs. Union leaders also recognised the need for increasing defence readiness and capabilities, in particular by strengthening the defence technological and industrial base accordingly. To that end, Union leaders committed to develop an industrial policy for the Union to ensure the growth of tomorrow’s key technologies, while paying particular attention to traditional industries in transition.

(7)

The industrial competitiveness of the steel sector is a core priority for the Union, which will contribute to sustainable growth, long-term prosperity and resilience. Decarbonisation can be a powerful accelerator of growth and resilience when integrated with industrial, competition, economic and trade policies. Global overcapacity affects the Union steel industry in the context of its transition towards carbon-neutral production. Therefore, the decarbonisation path of the steel sector in the Union should be one of the elements that can be taken into account by the Commission when amending the volumes of tariff quotas opened under this Regulation and should form part of the elements to be taken into account when evaluating the effectiveness of this Regulation.

(8)

Energy-intensive industries are focal sectors requiring urgent support to decarbonise and electrify, and to confront high energy costs, unfair global competition and complex regulations, all of which harm competitiveness. It is essential to enable those industries to remain globally competitive, and to increase production and capacity utilisation in the Union.

(9)

As recognised in the Commission Communication of 19 March 2025 entitled ‘A European Steel and Metals Action Plan’, steel is a metal of strategic importance for the Union’s defence capability. Particularly in a context marked by increasing global instability and heightened security pressures, stable and resilient supply chains of metals, including steel, and strong and competitive domestic production thereof, are essential for defence and aerospace, for achieving economic resilience and for avoiding unwanted dependencies on third-country suppliers.

(10)

Global overcapacity is expected to increase from 602 million tonnes in 2024, equivalent to five times the Union demand, to 721 million tonnes by 2027. The Union has already adopted several trade defence measures in the metals sectors, including in relation to iron and steel. However, those trade defence measures are offset by continuous large capacity additions across other regions, completely detached from the evolution of domestic and global demand. The Union steel industry is increasingly negatively impacted by global overcapacity and by global distortions, including non-market policies and practices in certain third countries that artificially support their domestic industries or circumvent Union trade defence measures and sanctions. As a result, the Union is the only major steelmaking region currently experiencing a decrease in its capacity. Hence, any measure relating to the steel sector should have a long-term perspective, since global overcapacity is a structural problem unlikely to be resolved in the short or medium-term.

(11)

In addition, the recent evolution of third-country trade-restrictive measures is further increasing the pressure of imports on the Union market, both in terms of volumes and prices. Such pressure is expected only to increase further, and risks causing a further decline in Union production.

(12)

As a result, the Union steel industry is in a dire situation, with the unprecedented loss of production capacity amounting to more than 30 million tonnes since 2018, a historically low-capacity utilisation rate reaching 67 % in 2024, around 30 000 jobs lost since 2018, with several thousand more job losses announced, and continued financial losses.

(13)

The rules-based multilateral trading system, with the World Trade Organization (WTO) at its core, continues to be fundamental for ensuring stability, predictability and fairness in global trade. This Regulation should therefore be designed and implemented in full compliance with the Union’s obligations under the WTO, particularly as regards the distribution of tariff quotas.

(14)

Given the rapidly worsening situation of the Union steel industry, its growing strategic importance and the unsatisfactory progress so far in finding a collective solution addressing global overcapacity, particularly in the framework of the GFSEC, it is necessary to adopt a measure replacing Implementing Regulation (EU) 2019/159. At the same time, the Union remains committed to delivering on the agreement, expressed at the 10 October 2025 Ministerial meeting of the GFSEC, to work towards a comprehensive framework for joint action with a view to addressing the root causes of global overcapacity.

(15)

Therefore, this Regulation should establish a coherent and comprehensive framework to tackle the negative trade-related effects of global overcapacity on the Union steel market. In view of the serious disturbances in the steel sector and the rapidly worsening situation of the Union steel industry, it is necessary to cover all third countries, including those with which the Union has concluded a free trade agreement and those benefiting from autonomous tariff preferences, such as the Union generalised scheme of tariff preferences under Regulation (EU) No 978/2012 of the European Parliament and of the Council (3). The framework established under this Regulation should provide, on the one hand, for the opening of tariff quotas and the setting of an out-of-quota duty and, on the other hand, for the possibility, where appropriate, of applying bilateral safeguard measures in respect of products from third countries with which the Union has concluded a free trade agreement. Where it is not appropriate to apply bilateral safeguard measures, products from third countries with which the Union has concluded a free trade agreement should be subject to the tariff quotas and the out-of-quota duty provided for in this Regulation.

(16)

Although under Implementing Regulation (EU) 2019/159 the out-of-quota tariff is set at 25 %, taking into account the level of tariffs in the steel sector in other key markets, it is appropriate to raise the out-of-quota duty to 50 %, to minimise the risk of trade diversion. That duty would be in addition to other duties applying to the product categories covered by this Regulation.

(17)

In view of the close and unique integration under the Agreement on the European Economic Area (4), Union imports from Iceland, Liechtenstein and Norway should be excluded from the application of the tariff quotas and the out-of-quota duty.

(18)

The total volume of tariff quotas has been calculated by applying the market share of imports into the Union market in the year 2013 as reference, which was around 13 %, to the overall consumption in the Union steel market in 2024, which is the latest year for which complete data are available. The calculation does not take into account imports which originated in Belarus and the Russian Federation, which are currently subject to import bans. That results in a total annual volume of tariff quotas of 18 345 922 tonnes.

(19)

The tariff quotas should be broken down per product category based on the share of imports that each product category held over the period 2022-2024. That reference period for breaking down the share of the tariff quota is appropriate, as it reflects accurately the more recent trade flows.

(20)

The tariff quotas should be administered on a quarterly basis in line with the management system provided for in Commission Implementing Regulation (EU) 2015/2447 (5). That type of administration ensures effectiveness by avoiding disproportionately large volumes of imports in a very short period, while not unduly hindering trade flows. During the first year of application of this Regulation, those tariff quotas that are not used within one quarter should be carried over to the next quarter within the same yearly period of application of the tariff quota, in order to provide greater flexibility for economic operators and contribute to ensuring continuity in supply chains and the fulfilment of existing supply contracts. After the first year of application of this Regulation, it might be necessary to adjust the rules on the carry-over of unused tariff quotas, taking into account the market reactions to the measures provided for in this Regulation, as well as the need to address possible market disturbances. For instance, experience with the administration of tariff quotas in the steel sector gathered with Implementing Regulation (EU) 2019/159 has shown that the carry-over of unused tariff quotas can, in certain circumstances, contribute to increased import pressure in particular quarters or product categories, especially where market demand weakens or consumption decreases while imports remain high. Conversely, the absence of carry-over can, in certain other circumstances, contribute to difficulties in ensuring continuity in supply chains and in fulfilling existing supply contracts.

(21)

Therefore, in order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission in respect of determining whether the carry-over of unused tariff quotas is to be allowed, taking into account, on the one hand, the increased level of import pressure and, on the other hand, the level of average use of tariff quotas and the insufficient availability of supply for downstream steel users. In particular, where the average use of the tariff quotas for a given product category is above 80 % during the first three quarters of the yearly period of application of the tariff quotas, the carry-over should be allowed, since the risk of a very high volume of free-of-duty imports in a certain quarter would be significantly reduced.

(22)

To ensure that this Regulation is effective in tackling the effects of global overcapacity, and in light of the specificities of steel products and the modern production and supply techniques, it is important to identify the country of ‘melt and pour’, meaning the original location in which raw steel or iron is initially produced in liquid form within a steel- or iron-making furnace and subsequently cast into its first solid state. That first solid state can encompass either a semi-finished product, including slabs, billets or ingots, or a finished steel mill product. Importers should be required to provide evidence on the country of ‘melt and pour’, such as by means of a mill test certificate. Such a requirement would increase transparency in the supply chain for steel imports and would allow the Commission to obtain reliable information on the origin of steel imports into the Union.

(23)

Implementing powers should also be conferred on the Commission to lay down the type of evidence to be provided by importers to prove the country of ‘melt and pour’. Before exercising its implementing powers with regard to the evidence on the country of ‘melt and pour’, it is important for the Commission to carry out consultations with stakeholders, including steel producers, users and Member States, to ensure that the type of evidence required is sufficient to prove the country of ‘melt and pour’, as well as carefully to assess the specific situation of small and medium-sized enterprises (SMEs) and avoid disproportionate administrative burdens.

(24)

Implementing powers should also be conferred on the Commission to lay down the country distribution of tariff quotas opened under this Regulation. In laying down that distribution, the Commission should take into account the import market share that prevailed in the Union steel market prior to the impact of global overcapacity. The year 2013 is the most appropriate basis for that calculation, since it was not impacted by the prevalence of global overcapacity, which surged significantly in 2015, but the effects of which were already visible, in terms of increased import penetration, in 2014. At the same time, it is important for previous tariff quotas, in particular those laid down under Commission Implementing Regulations (EU) 2023/1331 (6) and (EU) 2023/2840 (7) regarding trade flows of steel products originating in the United Kingdom and brought into Northern Ireland by direct transport from other parts of the United Kingdom, to be taken into account for the distribution of tariff quotas. Furthermore, the Commission should take into account current and future free trade agreements, in particular those that are at an advanced stage of negotiations. Other elements should, as applicable, also be taken into account, such as trade-distorting effects of third country measures impacting the Union steel market, the fact that a third country is found to be in breach of conventions of the International Labour Organization (ILO) or multilateral environmental agreements, the conclusion by the Union of international agreements under Article XXVIII of the General Agreement on Tariffs and Trade (GATT) 1994, the conclusion of any international agreement or non-binding international understanding addressing the levels of global overcapacity for the products covered by this Regulation, and the need to ensure diversification of sources of supply. Similarly, the interests of Union candidate countries facing an exceptional and immediate security situation, in particular where they previously benefitted from preferential access to the Union market for the product categories subject to this Regulation, such as Ukraine, should be taken into account, without undermining the effectiveness of this Regulation. Furthermore, the Commission should take into account the tariff quotas, if any, opened as part of bilateral safeguard measures, so as to ensure that the overall amount of tariff quotas opened by the Union does not exceed the amount provided for in the relevant Annex. Moreover, with a view to ensuring the coherence and consistency of the Union’s external action, where restrictive measures prohibit the import from third countries of one or more product categories falling within the scope of this Regulation, the Commission should not distribute tariff quotas to those third countries for those product categories. Finally, from 1 October 2027, the Commission should take into account the information gathered from importers on the country of ‘melt and pour’.

(25)

Implementing powers should also be conferred on the Commission to apply, where necessary, bilateral safeguard measures on imports of products originating in those third countries with which the Union has concluded a free trade agreement. Those bilateral safeguard measures should comply with the applicable free trade agreement. In determining which bilateral safeguard measures to apply, it is important for the Commission to have regard to the need to establish a coherent and comprehensive framework under this Regulation and to address the negative trade-related effects of global overcapacity on the Union steel market. Furthermore, to ensure that the Commission is able to apply bilateral safeguard measures swiftly, it is necessary that the conditions and procedures laid down in Regulation (EU) 2019/287 of the European Parliament and of the Council (8) do not apply to bilateral safeguard measures applied under this Regulation.

(26)

Implementing powers conferred under this Regulation should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and the Council (9). The examination procedure should be used for the adoption of the relevant implementing acts.

(27)

The Commission should adopt immediately applicable implementing acts where, in duly justified cases relating to the need to ensure the timely distribution of tariff quotas or the timely application of bilateral safeguard measures, imperative grounds of urgency so require.

(28)

In order to ensure that the level of quotas opened in relation to imports into the Union is adapted to changing circumstances in the markets of the products covered by this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union (TFEU) should be delegated to the Commission in respect of amending the volumes of tariff quotas laid down in this Regulation. At the same time, any amendment to those volumes should remain consistent with the objective of this Regulation. Thus, it is appropriate to set a minimum and a maximum combined value of the volumes of tariff quotas laid down in this Regulation, whilst taking into account that, according to the Organisation for Economic Co-operation and Development Steel Outlook 2025, steel consumption within the Union is forecast to remain stable until 2030. The maximum combined value should be calculated by applying a 13 % market share to the level of consumption registered in 2018, which was the highest annual level over the period 2013-2024. The minimum combined value should be determined having regard to the need to provide for an equivalent level of flexibility in the event of a downturn of the market. Accordingly, the Commission should be empowered to amend the volumes of tariff quotas laid down in this Regulation only in so far as their total value remains between 14 400 000 tonnes and 22 200 000 tonnes. In exercising its delegated powers, the Commission should take into account, as applicable, the evolution of demand, changes in the import market shares, significant developments in global overcapacity, the level of progress made in the decarbonisation path of the steel sector in the Union having regard to the Union’s climate goals, the evolution and extent of third-country measures impacting imports of steel, potential issues of availability of supply in certain product categories linked to insufficient capacity and to significant related price increases, the objectives of the Union’s common security and defence policy, and undue crowding-out effects in certain tariff quotas. The power to adopt acts in accordance with Article 290 TFEU should also be delegated to the Commission to amend the list of products in the Annex to Regulation (EU) 2020/2170 of the European Parliament and of the Council (10). It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (11). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(29)

Where the Commission distributes tariff quotas, applies bilateral safeguard measures or amends the volumes of tariff quotas, it should take into account the Union interest. The determination of the Union interest should be based on all available information and should consist of an appreciation of the various interests at stake, taken as a whole. Those interests include the interests of Union economic operators, including upstream and downstream industries, and the interests of Union final consumers.

(30)

Since this Regulation lays down new requirements for Union economic operators, the Commission should provide an online contact point for Union economic operators to request information on the implementation of this Regulation, including as regards the tariff administration scheme, the distribution of tariff quotas and the application of the ‘melt and pour’ principle.

(31)

The Commission should conduct periodic assessments of the product scope of this Regulation. In particular, by 31 December 2026, the Commission should assess the necessity of amending the product scope to cover certain products. By 30 June 2027, the Commission should assess the necessity of amending the product scope, in particular with a view to determining whether it should also cover products that are made of, or contain, a significant amount of steel, including as a matter of priority downstream iron and steel products not covered by this Regulation. Furthermore, the Commission should conduct a further assessment of the product scope by 30 June 2029 and every two years thereafter, unless significant market disruptions or sudden changes in global trade patterns require an earlier assessment. Moreover, the Commission should conduct timely consultations of stakeholders ahead of each assessment of the product scope. In particular, in view of the short timeframe for the initial assessment, a consultation should be initiated by 1 July 2026. Where the assessments show the necessity of amending the product scope, the Commission should consider submitting a legislative proposal to the European Parliament and to the Council to amend this Regulation.

(32)

By 30 June 2028, the Commission should, based on the information collected under this Regulation, assess whether it is necessary to designate the country of ‘melt and pour’ as the basis for benefiting from tariff quotas provided for in this Regulation, in particular to prevent steel produced in certain third countries contributing to global overcapacity from unduly entering the Union market following further transformation in other third countries. Based on that assessment, the Commission should consider submitting a legislative proposal to the European Parliament and to the Council.

(33)

By 30 June 2028 and every two years thereafter, the Commission should submit a report on the implementation of this Regulation to the European Parliament and to the Council. That report should be made public and could in particular contain information on the use and evolution of tariff quotas and the category and amount of imports falling outside of the tariff quotas.

(34)

By 30 June 2029 and every three years thereafter, the Commission should evaluate the effectiveness of this Regulation, taking into account the evolution of the key parameters that justified its adoption, including the evolution and trends of global overcapacity and its trade-related effects on the Union steel market, and the Union interest, and assess the evolution of the situation of the Union steel industry, including price levels and capacity utilisation, the impact on upstream and downstream industries as well as on final consumers in the Union, and the decarbonisation path of the steel sector in the Union having regard to the Union’s climate goals. In addition, it is important for the Commission to take into account the situation of third-country trade restrictive measures on steel and the implications and effects they might have, or be likely to have, in terms of risk of trade diversion into the Union market, as well as to analyse the situation concerning the existence of non-market policies and practices in third countries and their impact on the Union steel market.

(35)

It is necessary to amend Regulation (EU) 2020/2170 in order to ensure the continued application of the existing arrangements for the steel products originating in the United Kingdom and released for free circulation in Northern Ireland that are listed in the Annex to that Regulation.

(36)

In accordance with the principle of proportionality, it is necessary and appropriate for the achievement of the basic objective of addressing the negative trade-related effects of global overcapacity on the Union steel market to open tariff quotas and set an out-of-quota duty, and to provide for the possibility of applying bilateral safeguard measures in relation to imports of steel products into the Union. This Regulation does not go beyond what is necessary in order to achieve the objective pursued, in accordance with Article 5(4) of the Treaty on European Union (TEU).

(37)

Given the need to ensure that the measures provided for in this Regulation apply from 1 July 2026, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union,

(1)

in Article 1, the second paragraph is replaced by the following:

‘Goods listed in the Annex originating in the United Kingdom that fall within the scope of Regulation (EU) 2026/1384 of the European Parliament and of the Council (*1) and that are brought into Northern Ireland by direct transport from other parts of the United Kingdom shall also be eligible for treatment pursuant to Union import tariff rate quotas if those goods are released for free circulation in the territory of Northern Ireland.

(*1)  Regulation (EU) 2026/1384 of the European Parliament and of the Council of 17 June 2026 addressing the negative trade-related effects of global overcapacity on the Union steel market and amending Regulation (EU) 2020/2170 (OJ L, 2026/1384, 24.6.2026, ELI: http://data.europa.eu/eli/reg/2026/1384/oj).’;"

(2)

Article 1a is replaced by the following:

(a)

Article 4(2), Article 5(1), points (a) to (i), Article 5(2) to (5), and Articles 6 and 7 shall apply from 25 June 2026;

(b)

Article 4(1) shall apply from 1 October 2026;

(c)

Article 5(1), point (j), shall apply from 1 October 2027.