The European Commission will bring forward a new, long-term trade instrument to curb steel imports and protect EU producers, President Ursula von der Leyen told the European Parliament in Strasbourg on 10 September.
She said global overcapacity is compressing margins and “leaving little incentive to pay a clean premium”, complicating investment in decarbonisation across the sector. The announcement formed part of her annual State of the Union address and signalled that the Commission intends to present a proposal within weeks.
The decision point reflects the approaching end of the EU’s current steel safeguard, a tariff-rate quota regime first applied in 2019 to prevent trade diversion after U.S. import measures. The safeguard was prolonged in June 2024 for a final two years and is due to expire on 30 June 2026, eight years after its introduction, which is the maximum duration permitted under EU and World Trade Organization rules. The Commission has said it cannot extend the scheme further and must instead design a successor that is compatible with international obligations.
In 2025 the Commission tightened parameters within the existing framework. It reduced the annual liberalisation rate of quotas from 1 per cent to 0.1 per cent, curtailed access to unused quotas and removed the carry-over mechanism in categories facing strong import pressure. In parallel, it moved to trim overall inflows by about 15 per cent from April, citing the risk of market disruption following new U.S. tariffs. These adjustments were presented as short-term measures to stabilise conditions while a longer-term solution is prepared.
The direction of travel for the replacement has been outlined in the European Steel and Metals Action Plan adopted in March. The communication pledged to propose, no later than the third quarter of 2025, a measure to take effect from 1 July 2026 that would provide a “highly effective level of protection” against the negative trade effects of global overcapacity. In July the Commission opened a targeted consultation on future measures, seeking input from producers, downstream users and importers on options to manage volumes and deter circumvention.
The policy context is challenging. EU demand has been subdued, energy costs remain elevated compared with several competitors, and import penetration has increased over the past decade. At the same time, the sector is being asked to accelerate investment in low-carbon processes, including hydrogen-based steelmaking and additional electric arc furnace capacity. Against this backdrop, industry representatives have urged the Commission to deliver stronger border protections, and several member states have called for tougher action in response to rising imports.
Von der Leyen linked the trade file to decarbonisation economics, arguing that overcapacity and price pressure reduce the willingness of buyers to pay a premium for cleaner steel, thereby dampening investment signals. Her remarks suggest the successor regime will be designed not only to manage volumes but also to underpin the business case for green production within the single market. The Commission has also pointed to the need to align any new instrument with broader industrial policy objectives.
Procedurally, the Commission is expected to present its proposal shortly. Depending on its legal base, the measure could take the form of an implementing regulation or a legislative act. In either case, officials have indicated the framework must be in place ahead of the 30 June 2026 expiry to avoid a policy gap. Until then, the current safeguards remain applicable, with the tighter parameters introduced earlier this year. Market participants will watch the drafting for indications of how country-specific allocations, residual quotas and transfer rules will be treated.
Today’s announcement sets a clear timetable but leaves design choices open. Key issues include the extent to which any replacement relies on tariff-rate quotas, whether product-by-product caps are retained or revised, and how high-pressure categories are addressed. The consultation record suggests the Commission is weighing options intended to be durable and compliant with World Trade Organization rules, while maintaining space for the sector to finance decarbonisation.
