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EU Safeguard, Chinese stainless steel with its own measure?
EU Safeguard, Chinese stainless steel with its own measure?

13 May 2022 – A “swelling tide of Chinese stainless steel” is already rolling onto European shores, according to EU steelmakers. Actual statistical data from Eurostat is said to show that it is a drastic increase. EC and manufacturers are already talking about possible safeguard measures against China. And the European Steel Association is trying to lobby OECD member Turkey out of the new EU waste shipment regulation.

EU Safeguard: Will Chinese stainless steel get its own measure?

Chinese stainless steel imports have increased dramatically in recent months, especially in the first quarter of 2022, according to EU data. The increase in the course of 2022 could significantly exceed imports from 2019, the year of introduction of the EU Safeguard measure on certain steel products.

Lobby: Are EC and manufacturers already working on Safeguard measure?

The EU stainless steel producers have also noticed this. According to media reports, manufacturers are already in talks with the European Commission (EC) to stem the “swelling tide” of Chinese stainless steel. They are optimistic that the EC will impose a Safeguard measure on China.

Will China be included in existing Safeguard measure?

If the EC determines that Chinese stainless steel imports are damaging the market, it could, for example, impose its own quota on China in the existing Safeguard measure in order to circumvent an anti-dumping procedure.

Tariff rate quota or punitive tariffs?

However, the EC also has the option of introducing its own safeguard measure against Chinese imports. In doing so, it would even have the option of imposing high punitive tariffs on Chinese stainless steel instead of relying on a tariff rate quota.

Steel Scrap: EUROFER vs. Turkey

EUROFER, the association of European steel producers, has been working for some time to keep important raw materials, such as ferrous scrap (e.g. steel scrap), in the European Union. With the EU waste shipment regulation, a de facto export ban for non-OECD countries has already been achieved.

However, this does not go far enough for EUROFER, as out of 19 million tonnes of iron and steel scrap exported annually, about 13 million tonnes are sold to OECD member Turkey.

“Cannot give raw materials to anyone who does not meet our standards”

Axel Eggert, Director General of the European Steel Association, was quoted in a purchased PR article on Euractiv:

“We are in an absurd situation where the EU sets very high environmental standards and circular economy objectives for the internal market – that the EU steel industry fully shares -, while millions of tons of valuable secondary raw materials are being exported to jurisdictions where these same standards and objectives are not met. We cannot afford to give away a key secondary raw material such as scrap, if we want to fulfil the circular economy and climate objectives as well as ensuring EU strategic autonomy and social standards.”

Stop waste and scrap export to countries not meeting EU environment standards, asks EUROFER, 11 May 2022, Source: pr.euractiv.com

CBAM with dirty import loopholes

This is particularly exciting in that EUROFER lobbied the exemptions for non-climate-neutral products, Direct Reduced Iron (DRI) and hydrogen (H2), into the European Carbon Border Tax CBAM. Which is surprising, since the EU steel industry “fully shares” the high EU environmental standards.

Exceptions also in EU sanctions list

It is even more surprising when one looks at the EU’s sanctions list against Russia, which includes not only an exclusion for iron ore but also raw materials such as DRI produced from fossil energy sources, as well as iron or steel scrap, which have been exempted from the sanctions.

In any case, Mr Eggert, this is not the way to fulfil the goals of the “circular economy and climate goals as well as guaranteeing the strategic autonomy of the EU and social standards”.

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