Background

With the existing EU steel safeguard expiring on 30 June 2026, the Proposal for a Regulation of the European Parliament and of the Council addressing the negative trade‑related effects of global overcapacity on the Union steel market (COM(2025) 726) (the new steel measures) is designed to replace the existing safeguard measures and would instal a new tariff‑rate quota (TRQ) regime from 1 July 2026. In‑quota TRQ volumes would be markedly lower (roughly half of today’s levels), and any volumes above quota would attract a 50% duty. Coupled with a new “melt-and-pour” documentation requirement that could affect how quotas are allocated, these changes materially tighten market access. Against this backdrop, interinstitutional negotiations have intensified as 30 June 2026 approaches. We expect the political negotiations to conclude by mid-April. In this piece, we share our expectations on the new measures and provide more details on the political decision-making process.

Our three key areas to watch for the new TRQ regime

1. The most immediate impact for steel importers is the reduction in tariff-free import volumes by roughly 50% from current levels, combined with a doubling of the out-of-quota duty from 25% to 50%. This is a structural tightening, not a marginal adjustment. Importers should expect significantly more shipments to fall outside quota limits, triggering the higher duty rate. Building dual landed-cost models (in-quota versus out-of-quota) for Q3–Q4 2026 onward is essential, as the financial gap between the two scenarios will be substantial. The Council’s proposed floor and ceiling for total quota volumes also mean future adjustments via delegated acts could either modestly ease or further tighten access depending on market conditions.
2. The outcome on melt and pour is the single most consequential open question for importers. As it stands, the Commission has proposed melt and pour as a transparency and traceability obligation only; importers must identify the country where steel was originally melted and poured, but this data does not determine quota allocation. The Parliament, however, proposes that the country of melt and pour shall directly determine quota allocation, which would disrupt existing supply chains built around further processing in third countries. Even the Council’s middle ground – a mandatory review within two years on whether melt and pour should become the basis for allocation – signals that this shift may be a matter of “when” rather than “if”. Importers should begin mapping melt-and-pour origins across their product portfolios now, and consider embedding documentary-evidence clauses in supply contracts to ensure they can comply with whichever outcome emerges.
3. Downstream manufacturers and their suppliers should closely track how the final text addresses downstream industry concerns. The Council has introduced a “Union interest” principle requiring the Commission to consider significant price increases that seriously undermine downstream competitiveness when setting and adjusting quotas. The Parliament goes further, calling for impact assessments on Small and Medium Enterprises (SMEs) and foundries, measures to prevent stockpiling, and fair quota access. The Council also seeks a formalised stakeholder consultation to be launched by October 2026 to inform scope reviews and adjustments. These provisions, if adopted, would create both a legal basis and practical channels for importers and downstream users to submit data on EU supply availability, pricing impacts, and competitive harm.

Status of negotiations

The new steel measures have been under trilogue since Q1 2026 (i.e., informal three‑party negotiations between the European Parliament, the Council, and the Commission to agree on a compromise text). The third and very likely final trilogue meeting is scheduled for 13 April 2026. Recent reporting confirms that negotiators treat this session as the conclusive round of talks. While the most recent publicly available positions of the Commission (7 October 2025), Council (9 December 2025 mandate), and Parliament (3 February 2026 INTA) still diverge on core points, a compromise text dated 30 March 2026 (which post-dates the second trilogue of 17 March) indicates that institutional alignment is now close. Key features such as the carry-over mechanism remain under active debate (see outstanding issues below). The institutions aim to finalise trilogues as soon as possible to allow entry into force on 1 July 2026 at the latest, considering alignment on the compromise text, legal-linguistic review, formal adoption, and publication steps. We understand that the discussion at the final trilogue will focus on overall alignment and textual refinement, indicating that we are close to seeing the near-final outcome of the regulation.

Details on the outstanding issues in the negotiations

1. Melt and pour: Transparency tool or quota allocation basis?

• The Commission proposes melt and pour as a transparency and traceability obligation only – importers must identify the country of melt and pour, but this does not determine quota allocation.

• The Council maintains it as a transparency requirement but adds a review clause: within two years of entry into force, the Commission must assess whether melt and pour should become the basis for tariff quota allocation, and may submit a legislative proposal.

• The Parliament goes furthest: it proposes that the country of melt and pour shall directly determine the country of allocation of tariff rate quotas. The Parliament also proposes a ban on imports of products melted and poured in Russia or Belarus.

2. Quarterly carry-over of unused quotas

• The Commission proposes no carry-over: unused tariff quota volumes in one quarter shall not be carried over to the next quarter.
• The Council allows limited carry-over within the same yearly period. Reportedly, a blocking minority of 10 EU member states is still pressing for the inclusion of carry-over.
• The Parliament’s position does not explicitly address carry-over in the operative articles, but it calls for adjustments to ensure “fair access for all operators” and to “respond swiftly to changes in market conditions.”

3. Downstream industry protections

• The Commission’s proposal contains no specific downstream protection mechanism or product exclusion procedure.
• The Council introduced the Union interest principle, requiring the Commission to consider “substantial price increases seriously undermining the competitiveness of downstream industries” when allocating quotas and adjusting volumes.
• The Parliament goes further with multiple changes: it recognises the downstream steel processing industry as “of vital importance” and calls for impact assessments on “SMEs and foundries”; it requires consideration of the impact on “downstream value chains”; and it calls for measures to prevent stockpiling and ensure fair quota access.

4. Product scope and review timeline

• The Commission proposes a product scope review within two years and an effectiveness evaluation before 1 July 2031 and every five years thereafter.
• The Council shortens the first scope review to 18 months from entry into force, requires the Commission to launch a stakeholder consultation by 1 October 2026, and accelerates the effectiveness evaluation to four years from entry into force with subsequent evaluations every two years.
• The Parliament calls for an initial scope review assessment within six months of entry into force, followed by annual reviews, and adds that the Commission should assess impacts on downstream sectors, including SMEs and foundries. The Parliament also proposes empowering the Commission via delegated acts to add new product categories to prevent circumvention.

5. Quota volume adjustment: Delegated acts framework

• The Commission empowers itself to amend quota volumes via delegated acts, taking into account demand evolution, import market shares, overcapacity developments, supply availability, and crowding-out effects.
• The Council adds a floor and ceiling for total quota volumes: no lower than 15.2 million tonnes and no higher than 22.2 million tonnes. It also adds “significant price increases seriously undermining the competitiveness of downstream industries” as a factor.
• The Parliament adds the decarbonisation path of the steel sector and the impact on downstream value chains as additional criteria. It also adds the Union’s security and defence policy interests.

6. Russia and Belarus

• The Commission’s proposal excludes Russian and Belarusian imports from quota calculation (as they are subject to import bans).
• The Council maintains this position.
• The Parliament goes further: it proposes a strict prohibition on imports of products for which steel was melted and poured in Russia or Belarus, with no access to any tariff quota. It also seeks to codify this principle.

7. Bilateral safeguard measures (FTA partners)

• The Commission empowers itself to impose bilateral safeguard measures on imports from Free Trade Agreement (FTA) partner countries, which would “replace” the tariff measures under the regulation.
• The Council clarifies that bilateral safeguard measures must “take into account the Union interest”.

8. Additional product categories

• The Parliament proposes adding two new product categories: Stainless Wire and Non-Alloy and Other Alloy Forged Bars. It also proposes adding Tubes, Pipes and Hollow Profiles of Cast Iron.
• Council does not refer to these additions but proposes amendments to the scope of different product categories, including 4A, 7, 15, and 24.

9. Stakeholder input mechanism for EU users

• The Commission proposal does not establish a dedicated standing mechanism for importers and downstream users to provide structured input during quota setting and adjustments, beyond standard consultation practices.
• The Council seeks more formalised engagement, including a requirement for the Commission to launch a stakeholder consultation shortly after entry into force (with preparatory work targeted in October 2026) to inform scope reviews and adjustments.
• The Parliament emphasises systematic assessment of impacts on downstream value chains, SMEs, and foundries, and calls for measures to ensure fair access and prevent stockpiling; in practice, this would necessitate a regular channel for user input tied to adjustments and reviews.

What to watch and do next

The 13 April trilogue will be critical in narrowing these gaps. Stakeholders should pay particular attention to the outcome on melt and pour (which could fundamentally change how quotas are allocated), the carry-over mechanism (which affects import flexibility), and the downstream protection provisions. If adopted close to its current shape, the regime would materially tighten access for third‑country steel through roughly halved in‑quota volumes and a 50% out‑of‑quota duty, with potential quota allocation shifts driven by melt and pour.

To get ahead of this: (i) map melt and pour across critical Stock Keeping Units and embed documentary‑evidence clauses in supply contracts; (ii) build dual landed‑cost budgets (in‑quota vs. out‑of‑quota) and update pricing for Q3–Q4 2026; (iii) align call‑off schedules and monitor TRQ utilization in real time; and (iv) assemble data on EU availability and downstream harm to use in upcoming consultations and any Union interest assessments.