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European Steel Processors Association

ESPA

Over the past years, European rerollers have been faced with a number of common challenges, and have occasionally come together to discuss and formulate joint positions on trade agreements, CBAM, and other matters.

Lobbying Activity

Response to Trade measure addressing the negative trade-related effects of global excess capacity on the EU steel sector

8 Dec 2025

The European Steel Processors Association (ESPA) welcomes the Commissions proposal to address the negative trade effects of global overcapacity on the EU steel market. With current safeguards expiring in 2026 and ongoing global trade disruptions, the EU requires a new, proportionate, and effective trade mechanism. Such a mechanism should protect the European steel supply chain and uphold legal certainty within established trade rules. In this regard, ESPA supports the Commissions goal to prevent circumvention in the steel trade. However, new obligations, especially those related to the melted and poured principle, must remain proportionate and targeted. A mandatory melted and poured reporting for every steel product risks creating a parallel origin criterion contrary to the principle of legal certainty. ESPA therefore recommends applying the measure only when there is a difference between the country where steel was melted and poured and the country of its last substantial transformation. With that in mind, ESPA asks the European Commission to clearly define the intended and limited purpose of the melted and poured concept. Its application should enhance traceability and help detect circumvention of existing trade-defence measures. References in the Regulation should clarify that this principle is not a general rule of origin and does not alter the determination of origin under the Union Customs Code or international trade law. Such clarity is essential to maintain the consistency, legitimacy, and compatibility with international trade law of the EUs trade framework. Consequently, ESPA recommends that: The obligation to provide melted and poured data should arise only when the country of initial steelmaking differs from the country of transformation or export. Where both countries coincide, no additional reporting obligation should apply in order to avoid duplication with existing customs origin documentation. The Commissions delegated powers to define the technical implementation of the melted and poured requirement should be limited to cases justified by circumvention risks. ESPA emphasises the need for a balanced and targeted application of the melted and poured principle to strengthen enforcement of EU trade-defence measures, while ensuring the new framework remains workable, enforceable, and legitimate under EU and WTO law. In parallel, it is important that any new measure preserves the stability and predictability of steel supply for downstream industries. Even in a context of global overcapacity, the EU continues to rely on diversified and reliable access to steel inputs to meet its industrial, energy-transition and defence-related demand. Ensuring that the new framework supports a resilient and competitive EU steel value chain is therefore essential for maintaining the Unions industrial base.
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Meeting with Karin Karlsbro (Member of the European Parliament, Rapporteur)

21 Nov 2025 · Stålmarknaden

Meeting with Maria Elena Scoppio (Director Taxation and Customs Union) and

14 Nov 2025 · Discussions on technical issues concerning the design and implementation of the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Stéphane Séjourné (Executive Vice-President) and

28 Oct 2025 · High Level Dialogue with Industry executives on the implementation of CBAM.

Response to Carbon price paid in a third country under the carbon border adjustment mechanism (CBAM)

25 Sept 2025

Article 9(4) empowers the Commission to define rules for recognising foreign carbon prices. For ESPA, this provision is not a matter of trade defence, but an essential element to ensure that the CBAM remains an environmental instrument aimed at delivering a fair carbon cost signal. The objective must be to guarantee a level environmental playing field between EU and non-EU producers, by ensuring that embedded emissions face a comparable carbon price, without double charging or loopholes. In line with this principle, ESPA considers that: Eligibility: only explicit carbon prices (taxes, levies, fees, or allowances in compliance emissions trading systems) that are mandatory, paid, and not refunded should be recognised. Exclusions: voluntary offsets, export rebates, indirect subsidies or carbon prices applied only on exports should not be eligible, as they would distort the system. Consistency: deductions must correspond to the same time period and the same embedded emissions as declared under CBAM. Currency: ECB monthly averages should be the standard for conversion to ensure uniformity. Certification: independent, accredited third parties must verify documentation, ensuring credibility and transparency. This approach reflects the logic of the EU ETS and maintains CBAMs integrity, while also avoiding discrimination against importers who already face carbon costs in their countries of origin. By crediting only genuine, mandatory carbon prices, CBAM ensures that imported and EU-produced steel are subject to equivalent carbon cost burdens, reinforcing CBAMs legitimacy under WTO rules and supporting its role as a genuine climate measure rather than a protectionist instrument.
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Response to Adjustment of the obligation to surrender CBAM certificates to take account of ETS free allowances phase-out

25 Sept 2025

Article 31(2) requires CBAM adjustments to mirror ETS allocation rules and to decline linearly with the ETS phase-out (20262034). Key principle: Transparency: Article 30(6) requires monitoring and reporting; benchmarks and datasets must be public and regularly revised. Evidence from ETS phase 3 (20212024) shows BF plants received on average 33% more free allowances, while EAF plants had to purchase around 23% of their allowances. This imbalance must not be perpetuated in CBAM, or it will further weaken incentives for low-carbon routes. The Commission has confirmed its commitment to start the definitive application of CBAM on 1 January 2026. However, since the ETS benchmarks for 20262030 will only be adopted in Q1 2026, DG TAXUD envisages a two-step approach: early adoption of an implementing act with provisional CBAM benchmarks based on ETS 20212025 values, adjusted with approximate improvement rates; subsequent replacement with final CBAM benchmarks 20262030, applied retroactively from 1 January 2026, once available, to ensure equal treatment and legal robustness. ESPA expressed concerns that launching CBAM on 1 January 2026 with provisional benchmarks (ETS 20212025 values) and then retroactively adjusting them once ETS 20262030 benchmarks are available would: create significant uncertainty for operators in terms of planning, pricing and contracting; risk becoming an unjustified trade barrier, penalising importers who cannot anticipate the retroactive adjustment. To safeguard both legal certainty and environmental integrity, ESPA recommends that: the first semester of 2026 should be treated as a provisional phase, with references fixed exclusively on ETS 20212025 values; if ETS 20262030 benchmarks are published in Q1 2026, the new CBAM benchmarks would apply as of 1 July 2026, without retroactive adjustments. This approach would: ensure that CBAM obligations are based on transparent and predictable parameters; allow industry and importers to adjust contracts and supply flows on a reasonable timeline; avoid retroactive corrections that undermine confidence in the mechanism. The Commission acknowledged this concern in recent exchanges and indicated it would reflect further on the proposal. ESPA considers that adopting a short transitional grace period until June 2026 represents the most pragmatic and legally robust way to launch CBAM. Please, find attached ESPA's detailed position paper on the issue.
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Response to Carbon border adjustment mechanism (CBAM) methodology for the definitive period

25 Sept 2025

Article 7(7) requires embedded emissions to be calculated according to harmonised rules; Article 9(4) demands that benchmarks used for adjustments mirror ETS; Article 10(2) ensures uniformity of conditions. These provisions form a legal obligation: CBAM cannot diverge from ETS logic. Actual values and defaults ESPA strongly supports that actual values, verified under ETS-consistent MRV systems, remain the rule. Default values must be used only as a fallback, must be transparent, regularly updated, and designed to avoid systematic distortions. The Case of DRI DRI is one of the most important strategic raw materials for the decarbonisation of European steel. Unlike scrap, DRI allows the production of high-quality grades where scrap quality is insufficient, and it is essential to balance the growing scarcity of prime scrap in Europe. At present, ETS recognises DRI only through the Hot Metal benchmark. According to Articles 9 and 31, CBAM must mirror this logic. This implies that: - for the DRI share in EAF steelmaking, the Hot Metal benchmark should be applied; - for the scrap share, the EAF benchmark should be applied. Without this route-specific approach, CBAM would reduce steelmaking to just two benchmarks (BOF vs scrap-EAF), unfairly assimilating DRI-EAF to pure scrap-EAF. The consequences would be severe: - Genuine abatement efforts made by DRI producers would be ignored. - DRI-based plants would face higher CBAM costs than BOF producers, despite being less carbon-intensive. - Investments in low-carbon DRI technology would be discouraged, while higher-emission BF-BOF routes would continue to enjoy more favourable benchmarks. - CBAM environmental logic will be undermined and the legitimacy of the measure will be compromised. This is not about granting an advantage to DRI: it is about ensuring coherence with ETS benchmarks and rewarding actual decarbonisation efforts. Route-specific formulas are the only way to maintain CBAM as a genuine environmental measure rather than a protectionist tool. In the future, when ETS introduces differentiated benchmarks for DRI depending on the energy carrier (natural gas, grey hydrogen, green hydrogen), CBAM will be legally bound to replicate them. This will ensure consistency, fairness, and neutrality across production routes. Any other approach will expose the mechanism to potential legal challenges, particularly from third-country DRI producers. Attached is ESPA's paper including our detailed position and recommendations for the improvement of the CBAM communication template.
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Meeting with Vicente Hurtado Roa (Head of Unit Taxation and Customs Union) and European Chemical Industry Council and

19 Sept 2025 · Discussions on technical issues concerning the design and implementation of the Carbon Border Adjustment Mechanism (CBAM)

Response to Extension of the scope of the carbon border adjustment mechanism to downstream products and anti-circumvention measures

25 Aug 2025

The European Steel Processors Association (ESPA) welcomes the EUs efforts to strengthen the Carbon Border Adjustment Mechanism (CBAM) as a key tool to prevent carbon leakage and support the decarbonisation of the steel sector. ESPA supports extending CBAM to downstream products to address carbon leakage risks across the value chain and advocates for robust anti-circumvention measures to ensure effectiveness. However, ESPA cautions against introducing the melted and poured concept, as it would undermine CBAMs environmental objectives and create unnecessary trade barriers. Instead, ESPA proposes practical solutions to enhance transparency, broaden product coverage, and maintain fair competition. I. Extending CBAM scope to downstream products Steel and other primary goods are critical to value chains spanning mobility, construction, energy, and appliances, many of which are strategic for the EUs Green Deal agenda. Numerous downstream sectors dependent on CBAM-covered goods are limited in their ability to absorb carbon costs without facing competitive challenges and risk losing market share to producers in countries without equivalent carbon regulations. Expanding CBAM to downstream products is necessary to level the playing field, safeguard EU industries, and reduce carbon leakage risks. This extension must be carefully designed to avoid excessive administrative burdens. ESPA recommends adopting a streamlined emissions data collection system across the production chain, allowing default or estimated values where specific data is unavailable. Primary CBAM-covered goods like steel must undergo precise carbon footprint assessments aligned with Commission rules to ensure consistency and comparability. To ensure a smooth transition, ESPA proposes a phased approach: Initially include products where CBAM-covered inputs (e.g., steel, cement, aluminum) constitute over 50% of total product weight. Gradually extend the mechanism to products containing over 25% CBAM-covered inputs. II. Avoiding circumvention without compromising CBAM environmental goals ESPA is concerned about speculation regarding the inclusion of the melted and poured concept in CBAM. ESPA strongly opposes this approach, as it undermines CBAMs objectives by shifting the focus from carbon intensity to origin, weakening its core purpose, creating compliance uncertainty, and risking protectionist signals to markets. This approach could also complicate supply chain tracking, increase compliance costs, and create loopholes that fail to account for the full carbon footprint of steel products. For example, steel melted and poured in a low-emission country may use raw materials from high-emission sites, distorting the true carbon footprint. Incorporating melted and poured into CBAM risks legitimising this concept as a new standard for rules of origin, potentially leading to demands for similar restrictions on EU-processed goods (e.g., vehicles, industrial equipment, renewable energy components). This could undermine the competitiveness of EU exports and disrupt established trade practices. To address circumvention risks without compromising CBAMs objectives, ESPA proposes: 1. Company-wide emissions Require CBAM declarations to reflect the average emissions of all production sites operated by a company in a given country, rather than focusing solely on specific goods. 2. Supply chain transparency Ensure transparency to track origin of raw materials and intermediate products; conduct random compliance checks and annual third-party audits to verify reporting. 3. Broaden product coverage Incorporate products manufactured using CBAM-covered materials into the mechanism as soon as possible to prevent production shifts further down the value chain. 4. Amend anti-circumvention provisions (Article 27) Shorten investigation timelines from 9 months to 3 months; cap imports from countries under investigation at historic levels during the investigation period.
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Response to Trade measure addressing the negative trade-related effects of global excess capacity on the EU steel sector

18 Aug 2025

The European Steel Processors Association (ESPA) appreciates the opportunity to provide input on the European Commissions upcoming steel measures, and highlights that it is essential to ensure that the new mechanism effectively addresses global overcapacity while supporting the competitiveness of the entire EU steel value chain. Above all, ESPA advocates for policies aligned with EU priorities to mitigate trade dependencies without resorting to protectionism. Within this context, ESPA strongly opposes the introduction of a "melted and poured" origin rule in the new steel measures. While the "melted and poured" concept has been applied in trade defense measures in other jurisdictions, such as the U.S., its inclusion in the EU framework would create significant challenges without effectively addressing the root causes of market distortions. The "melted and poured" rule disproportionately impacts certain production models, particularly those of processors and re-rollers that rely on semi-finished steel inputs from multiple origins. This would create unnecessary complexity and discrimination within the EU steel value chain, undermining supply chain flexibility and increasing compliance costs for law-abiding operators. In addition, adopting the "melted and poured" rule risks setting a precedent for future trade agreements and rules of origin standards. If legitimized by the EU, this approach could lead to demands for similar restrictions on EU-processed goods, such as vehicles, industrial equipment, and renewable energy components, undermining the global competitiveness of EU exports. Rather than introducing a "melted and poured" rule, ESPA advocates for enhancing existing anti-circumvention protocols, improving customs monitoring, and mandating full traceability and digital audit trails across the chain of origin. These measures would effectively prevent origin shifting and transshipment without harming legitimate trade or increasing compliance burdens. ESPA also supports the introduction of a global TRQ system with fixed per-country caps. This approach addresses structural risks such as trade deflection and market concentration. By promoting source diversification and limiting the dominance of any single exporter, this quota architecture ensures a balanced and effective safeguard framework. The proposed measures must strike a balance between addressing global overcapacity and supporting the competitiveness of the EU steel industry. ESPA believes that a well-calibrated TRQ system, combined with robust anti-circumvention measures and traceability protocols, offers the most effective solution. We urge the Commission to reject the "melted and poured" rule and focus on measures that promote fair competition, supply chain flexibility, and alignment with WTO principles. ESPA remains committed to engaging constructively with the Commission to ensure the new steel measures are fit for purpose and support the long-term resilience of the EU steel value chain.
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Meeting with Gerassimos Thomas (Director-General Taxation and Customs Union)

10 Jun 2025 · Exchange of views on the Carbon Border Adjustment Mechanism

Meeting with Aleksandra Kordecka (Cabinet of Executive Vice-President Stéphane Séjourné), Arthur Corbin (Cabinet of Executive Vice-President Stéphane Séjourné)

10 Jun 2025 · Steel

Meeting with Maria Elena Scoppio (Director Taxation and Customs Union)

10 Jun 2025 · Exchange of views on the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Maria Elena Scoppio (Director Taxation and Customs Union) and European Chemical Industry Council and

14 Mar 2025 · Discussions on technical issues concerning the design and implementation of the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Teresa Ribera Rodríguez (Executive Vice-President) and

12 Mar 2025 · Discuss challenges faced by the European steel processor industry

Meeting with Bernd Biervert (Cabinet of Commissioner Maroš Šefčovič), Chiara Galiffa (Cabinet of Commissioner Maroš Šefčovič)

30 Jan 2025 · Challenges for the steel sector from the point of view of EU steel re-rollers

Meeting with Joan Canton (Head of Unit Internal Market, Industry, Entrepreneurship and SMEs)

30 Jan 2025 · Exchange of views with the European steel processing industry about their specific business model, and the challenges they face from a trade perspective, as well as their contribution to a more sustainable steel sector.

Meeting with Gerassimos Thomas (Director-General Taxation and Customs Union) and

29 Jan 2025 · Physical meeting - Exchange of views on the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Maria Elena Scoppio (Director Taxation and Customs Union) and

17 Jan 2025 · Discussions on technical issues concerning the design and implementation of the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Kerstin Jorna (Director-General Internal Market, Industry, Entrepreneurship and SMEs)

27 Nov 2023 · Presentation of the newly formed European Steel Processors Association and discussion on developments and challenges faced by the industry.

Meeting with Sabine Weyand (Director-General Trade)

21 Nov 2023 · Current EU-US negotiations on steel, GSA, TDI, sanctions/Russia