Cyprus backs EU deal to protect steel industry

The Cyprus Presidency of the Council of the EU and the European Parliament reached a provisional agreement on a new regulation aimed at addressing the impact of global steel overcapacity on the European market.

The agreement, finalised late on Monday, introduces an updated framework designed to protect the EU steel sector from trade diversion and excess supply, while ensuring compliance with international trade obligations and maintaining flexibility for businesses, including downstream industries.

The new regulation will replace existing safeguard measures set to expire on June 30, 2026, ensuring continuity and avoiding regulatory gaps.

According to the European Commission, the initiative responds to projections that global steel overcapacity will reach 721 million tonnes by 2027, representing more than five times the EU’s annual consumption.

The measures are also intended to safeguard approximately 2.5 million jobs and support the bloc’s broader decarbonisation objectives.

The agreement includes annual tariff-free quotas of 18.3 million tonnes and introduces a 50 per cent duty on imports exceeding those thresholds.

These provisions will apply across 30 steel product categories, forming the core of the new protective framework.

The regulation also introduces a “melt and pour” requirement, aimed at improving traceability across the steel supply chain.

The rules will apply to imports from all countries, with the exception of European Economic Area members, which will still be subject to traceability requirements.

“The European steel industry is a strategic sector for our economy, our security and our green transition,” said Cyprus Energy Minister Michael Damianos.

“This agreement equips the EU with a stronger, rules-based tool to address global overcapacity while ensuring fair competition and long-term resilience,” he added.

“A crucial step to protect the steel sector from unfair trade practices and support its global competitiveness and transition to climate neutrality,” said Bernd Lange, Chair of the European Parliament’s INTA Committee.

The agreement also provides a revised tariff-rate quota system, reducing import quotas by around 47 per cent compared to 2024 levels.

It allows for limited flexibility through the carry-over of unused quotas during the first year of implementation.

From the second year, the commission will evaluate whether such flexibility should continue, based on prevailing market conditions.

Additional provisions include enhanced monitoring and review mechanisms, with the commission set to reassess product coverage within six and twelve months of the regulation entering into force.

The EU also reaffirmed its intention to reduce reliance on Russian steel imports and to diversify supply sources.

A joint declaration accompanying the agreement underlined the commitment of the co-legislators and the commission to reducing economic dependencies on Russia.

Moreover, it emphasised ongoing efforts to diversify steel imports and gradually phase out Russian steel products.

The agreed text will now proceed to formal adoption by both the European Parliament and the Council in the coming weeks.

The regulation is scheduled to enter into force on July 1, 2026, the announcement concluded.