Parliament passes the new steel safeguard regulation: What it means for CBAM importers
CBAM Weekly – Issue 95
606 votes in favour: a clear majority confirms the regulation
On Tuesday, the European Parliament in Strasbourg adopted the new steel safeguard regulation by 606 votes to 16, with 39 abstentions. The regulation replaces the safeguard measures in force since 2018, which expire on 30 June 2026. It enters into force on 1 July 2026.
The EU steel sector thereby gains a permanent trade-policy instrument against global overcapacity, which the Commission projects to reach 721 million tonnes by 2027, more than five times the EU's annual consumption.
The new quota and the 50 percent tariff
The annual duty-free import quota falls to 18.3 million tonnes, a reduction of around 47 percent compared with 2024 levels. Imports above the quota will be subject to a 50 percent customs duty, double the current rate of 25 percent. The same rate applies to steel products not covered by any quota. For importers, this means a markedly narrower base of supply from third countries and a noticeable increase in cost for every additional tonne brought in above the allocation.
Melt and pour: a new rule of origin
The most consequential change lies in how origin is determined. The country of origin is no longer the country of last substantial transformation but the country where the crude steel was first melted and poured, the so-called "melt and pour" principle. The Commission is required to apply this criterion when allocating quotas. The common practice of routing steel from overproducing countries through a third state with only minor further processing is thereby largely closed off. For importers, this means origin documentation must reach back to the crude-steel stage.
Where the safeguard regulation and CBAM intersect
The new regulation does not replace CBAM. It complements it. CBAM addresses the carbon-cost gap between EU and non-EU producers. The safeguard regulation addresses the volume problem. Both instruments hit the same importer, and both demand robust data on where the steel actually comes from.
The "melt and pour" criterion in the safeguard regulation conceptually aligns with the CBAM requirement to capture embedded emissions at the crude-steel stage. Importers who have already built a reliable supplier base for CBAM can now use that data foundation for quota verification as well. Importers without end-to-end traceability will have to put it in place for both regimes from 1 July onwards.
Outlook
Formal adoption by the Council is still outstanding but is considered procedural. Within the first six months the Commission will assess whether the scope of products should be expanded. Importers should use the remaining weeks before 1 July to align supply chains with the "melt and pour" documentation requirement and to bring existing contracts in line with the new tariff and quota parameters.
Support
If you would like to understand how the new steel safeguard regulation and its interaction with your CBAM obligations specifically affect your sourcing, your origin documentation, and your supplier structure, please write to me at helge@kolum.earth.