New EU rules limit the amount of Turkish hot-rolled flat steel that can enter the bloc without an additional tariff. Turkey’s country-specific annual quota has been reduced by around 60 per cent. Turkish steelmaker Çolakoğlu Metalurji warns that European manufacturers could face higher costs, although the scale of the impact remains uncertain.
The European Union introduced a new system for steel imports from non-EU countries on 1 July 2026. The framework replaced the safeguard measures that had been in force since 2018 and expired on 30 June.
The new system limits total duty-free steel imports to approximately 18.3 million tonnes per year. This is around 47 per cent below the volume allowed under the 2024 reference system. Imports exceeding an available quota are now subject to an additional tariff of 50 per cent, up from 25 per cent under the previous arrangement.
One of the most significant changes concerns Turkish exports of hot-rolled sheets and strips in product category 1A. Turkey’s annual quota has fallen from approximately 1.59 million tonnes to around 642,000 tonnes, representing a reduction of almost 60 per cent.
The quota is divided into quarterly allocations. The first allocation amounted to approximately 160,600 tonnes. According to market data, applications covering around 229,600 tonnes were submitted when the quota period opened on 1 July. Requested volumes therefore exceeded the available allocation by roughly 43 per cent.
The exhaustion of a quota does not mean that imports must stop. Turkish steel may still be sold in the EU, but volumes above the quota are normally subject to the additional 50 per cent tariff.
As a trade agreement partner, Turkey may also compete for certain supplementary quota volumes. These are shared with other suppliers and generally allocated on a first-come, first-served basis.
Turkish producer warns of higher costs
Gökhan Erdem, sales and marketing director at Çolakoğlu Metalurji, told industry publication SteelOrbis that the largest share of the additional cost could ultimately fall on European companies that use steel.
– European steel consumers will have to assess the additional costs they must bear to continue operating and the growing risks they face under the new conditions, Erdem said, according to SteelOrbis.
Hot-rolled flat steel is used in the automotive industry, mechanical engineering, construction, pipe manufacturing and the production of other processed steel products. If import availability falls while demand remains high, European buyers could have fewer suppliers from which to choose.
The restrictions may support EU steelmakers and help them increase capacity utilisation. At the same time, reduced import competition and the higher cost of deliveries exceeding the quota could contribute to rising prices for steel-consuming companies.
The effect is unlikely to be uniform across the EU. Member states with substantial domestic steel production may have more sourcing options than countries that depend more heavily on imports.
Demand, energy costs, inventories, freight rates and the availability of steel from alternative suppliers will also influence prices.
Çolakoğlu Metalurji’s assessment should therefore be viewed as the position of a producer directly affected by the quota reduction. It has not been established that most of the additional cost will be passed on to European steel buyers or that prices will rise as sharply as the company fears.
The European Commission has justified the new rules by pointing to global steel overcapacity. According to the Commission, excess production capacity, non-market policies and the redirection of international trade have increased pressure on European steel plants.
The stated objective is to preserve the EU’s production capacity while maintaining controlled market access for traditional foreign suppliers.
Carbon costs could reshape competition
Alongside import quotas, steel is subject to the EU Carbon Border Adjustment Mechanism (CBAM). Its definitive phase began on 1 January 2026 and requires importers to report the emissions generated during the production of imported goods.
From February 2027, importers must begin purchasing CBAM certificates for emissions associated with goods imported during 2026. In principle, the cost should correspond to the carbon price that a comparable EU producer would face under the bloc’s Emissions Trading System.
A carbon price already paid in the country of origin may be deducted under certain conditions.
Çolakoğlu Metalurji argues that Turkish steel can remain competitive because of short transport distances, reliable deliveries, product quality and, in some cases, a relatively low carbon footprint.
CBAM does not, however, give Turkish steel a general advantage. The cost will depend on emissions at the individual production plant, the technology used and the quality of the verified emissions data.
Steel made in electric arc furnaces using a large share of recycled scrap can, for example, have lower emissions than coal-based steel produced in blast furnaces. The carbon intensity of the electricity supply is also important.
Emissions and future CBAM costs may therefore vary considerably between Turkish steelmakers, production routes and individual products.
Relocation remains a risk, not a confirmed outcome
The Turkish steel industry is expected to adapt by seeking alternative export markets, changing its product mix or competing for supplementary EU quota volumes. Turkey has extensive experience of trade defence measures and is geographically close enough to offer relatively short delivery times to European customers.
Erdem has also warned that higher steel costs could affect employment and, over time, encourage some European steel users to relocate production outside the EU. No evidence has been presented, however, that large-scale relocation has already begun because of the new quotas.
For industrial companies, the immediate questions are how quickly the quotas will be exhausted and whether European steelmakers can replace reduced imports at competitive prices.
The European Commission is expected to monitor the regulation and conduct recurring assessments of its effects on competitiveness, small and medium-sized enterprises and downstream industries that use steel as an input.
The rules therefore highlight a clear conflict of objectives. The EU wants to protect domestic steel production and reduce exposure to a global market characterised by substantial excess capacity.
At the same time, the automotive, engineering and construction industries need access to sufficient quantities of steel at prices that allow them to compete internationally.
Sources: European Commission, SteelOrbis and Eurometal.
