Clima

EU Sets Steel Limits, Auto Industry Warns of Rising Costs

The European Commission has proposed doubling tariffs on steel to 50% while cutting import quotas by nearly half. The automotive sector warns that these measures could significantly raise costs and threaten the competitiveness of car manufacturers in Europe.

2 min read · 31 Jan 2026

Adam Radoliński ·

Industry Concerns

The European Automobile Manufacturers’ Association (ACEA), representing brands like BMW, Volkswagen, and Stellantis, has expressed serious concerns over the proposed regulations.

“Protecting the steel industry makes sense, but the restrictions proposed by the European Commission go too far,” says Sigrid de Vries, ACEA’s Secretary General.

European carmakers source around 90% of their steel within the EU, but the sector still relies on imports of certain types of steel used in automotive production, which under the current quota system are quickly exhausted.

Toward a Decarbonized Steel Sector

The Commission’s proposals align with the broader Fit for 55 strategy, aiming to decarbonize the steel industry and strengthen Europe’s autonomy in key production areas. Commission President Ursula von der Leyen emphasizes the strategic importance of EU steel:

“A strong, decarbonized steel sector is vital for the competitiveness of the European Union, economic security, and strategic production autonomy. We must act now.”

The Commission’s measures are designed to protect EU steel producers from overproduction, especially from China, and from indirect effects of U.S. tariffs.

New Quotas and Tariffs

Under the proposals, import quotas could drop to just 13% of the EU steel market, equating to around 18.3 million tons annually. This represents a reduction of over 30% in major steel product categories compared to recent years.

Imports exceeding the new quotas would face a 50% tariff, up from the current 25% under the existing quota and anti-dumping system.

The Controversial “Melt and Pour” Rule

Another source of concern is the “melt and pour” requirement, which obliges importers to specify where the steel was melted and cast. ACEA warns that in the complex, global supply chains of the automotive industry, meeting this requirement will be extremely challenging.

“We need to find a better balance between the needs of European producers and steel users in the automotive sector,” ACEA stresses, pointing to the potential inflationary impact of stricter import restrictions.

The Commission’s proposals still need approval from EU member states and the European Parliament.

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Adam Radoliński

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