From 1 July 2026, the European Union has officially replaced its long-standing steel safeguard regime with a new tariff quota framework designed to address the effects of global steel overcapacity on the EU market. The new system is established by Regulation (EU) 2026/1384 and implemented through Commission Implementing Regulation (EU) 2026/1457, introducing a fundamentally different approach to managing steel imports into the Union.
Understanding how the new tariff quotas work is essential for customs operators and steel-consuming industries. In practice, access to a quota can determine whether an import is subject to a 0% duty – which is the tariff rate currently applicable in the EU for these products – or to an additional 50% ad valorem tariff once the relevant quota has been exhausted.
A new framework for steel imports
The previous safeguard system, administered under Regulation (EU) 2020/2170, has been replaced by a quota-based mechanism allocating approximately 18.3 million tons of steel imports across 26 product categories.
The new framework seeks to balance two objectives:
- Protect the EU steel industry from distortions caused by global overcapacity.
- Preserve predictable access to imported steel needed by European manufacturers.
Unlike the former system, which largely relied on broad safeguard measures, the new regime allocates quotas by product category and, in many cases, by country of origin, reflecting historical trade flows between 2022 and 2024.
How the quota system works
Although, from a strictly legal point of view, there are five levels or channels of access to the quotas, from a customs management perspective, the division could be simplified to three levels with different order numbers, availability windows and operational rules. Movement between levels requires explicit operator action as quota allocation does not occur automatically:
| Level | Type of quota | Who can access | How to access | Duty |
|---|---|---|---|---|
| 1 | Country-specific (per country) – MFN + ALC simultaneous | All countries with significant historical imports | One H1 submission and one order number (simultaneous MFN+ALC parts) | 0% |
| 2 | FTA – Country-Specific (per FTA country) | FTA countries only (if marked in Section 2, Annex II for that category*) | New H1 with level 2 order number. First-come, first-served when level 1 exhausted. | 0% |
| 3A | Residual (FTA or MFN). Guaranteed allocation with specific order number within 3B and 3C level quotas | FTA countries ONLY (if marked in Section II.5 for that category*) | New H1 with level 3A order. Quarterly opening. NO first-come (guaranteed share). | 0% |
| 3B | FTA – Residual (open access) | FTA countries ONLY (if marked in Section II.4 for that category*) | New H1 with level 3B order. Quarterly opening. First-come competition. | 0% |
| 3C | MFN – Residual (open access) | All countries except those in Section II.3 (exclusions*) | New H1 with level 3C order. Quarterly opening (1 Jan/Apr/Jul/Oct). First-come competition. | 0% |
* The allocation tables, full categories list, eligible origins, country-specific exclusions and TARIC quota order numbers are detailed in Annexes I and II of Implementing Regulation (EU) 2026/1457.
While different quota mechanisms may coexist for the same product category, a given import quantity can only be allocated once against an available quota balance. The existence of multiple quota routes therefore increases operational flexibility for operators, which does not mean an importer can manually choose between two active quota numbers for the same shipment. Instead, the new Steel Overcapacity Regulation is based on a strict, non-negotiable chronological hierarchy, so an importer cannot choose or "save" a specific quota for a later date.
The system operates under a clear, sequential structure:
- Level 1 (Country-Specific Quota): Importers must apply for their country’s specific allocation first.
- Level 2 (FTA Quota – CSQ): Only when Level 1 is completely exhausted (100% full) can importers submit a new H1 declaration applying for the exclusive FTA Quota – CSQ additional balance.
- Level 3 (Standard "Other Countries" Pool): If applicable to the product category and both Level 1 and Level 2 are completely exhausted, importers may attempt to apply for the global residual pool if any volume remains.
Beyond the allocation structure itself, the new regime also provides greater flexibility in quota management. During the first year of application, unused quarterly quota volumes may be carried forward to the following quarter within the same annual quota period, helping operators better manage supply requirements where available quotas are not fully utilized.
Simultaneous access to both parts of the quota does not mean using more than one quota at the same time
A Country-Specific Quota operates with a single import declaration (H1) containing one quota order number. Within that single declaration:
- the operator requests access to the country-specific quota order number,
- the EU system processes the request against both the MFN part and the FTA part of that single country-specific allocation,
- a single quantity is allocated against a single quota order.
The "simultaneous" aspect refers to the fact that within this “level 1”, the operator does not need to first exhaust the MFN part before accessing the ALC part. Both are available through one submission.
The practical implication is the following:
(H1)
NUMBER
ALLOCATION
Different shipments may use different quota order numbers, but each declaration stands alone. If a different quota order number is required, a new H1 declaration must be lodged.
That gives room to plan. If the country-specific volume looks likely to run out quickly, orders can be spread across both mechanisms to keep coverage throughout the period. Once a country-specific quota is exhausted, operators can move to the residual quota, where they compete with others in the same situation, still on a first-come, first-served basis.
However, residual quotas do not all stay open continuously: they are released quarterly, on 1 January, 1 April, 1 July and 1 October. If a country-specific quota runs out in mid-July, the next residual tranche only opens on 1 October.
At this point, it is important to note that level 2 (an intermediate tier available only to FTA countries and opens from the first day of each quarter) is not the same as residual quotas. If level 2 exists for a certain country/category, it is available immediately on the first day of that quarter (not only on 1 October or the next quarter boundary).
What determines country access
Annex II of Regulation (EU) 2026/1457 contains five sections, each defining a different category of countries and their access rights:
| SECTION | Countries included | What it means |
|---|---|---|
| II.1 | All FTA countries (Turkey, Brazil, Vietnam, Japan, Korea, Mexico, etc.) | FTA countries with level 1 quota (country-specific with simultaneous MFN+ALC parts) |
| II.2 | FTA countries (marked for specific categories) | FTA countries with level 2 quota available for that category (FTA – Country-Specific, accessed by first-come) |
| II.3 | Countries EXCLUDED from residual quotas (marked for specific categories) | Country has NO access to residual quotas for that category (actively excluded) |
| II.4 | FTA countries (marked for specific categories) | FTA countries with open-access residual quota (level 3, competes on first-come basis quarterly) |
| II.5 | Some of the FTA countries listed in II.4 (marked for specific categories) | FTA countries with pre-set allocation in residual quota (level 3, guaranteed share – no first-come competition) |
How a steel quota is allocated
Quota allocation is managed centrally by the European Commission under the traditional EU principle of first come, first served. During an initial blocking period running from 1 to 14 July 2026, quota requests were recorded but not immediately allocated. All requests submitted during that period were ranked according to their time of arrival, and allocations began on 15 July 2026 following that order. Since then, quota allocation has operated on a continuous basis while available balances remain.
In practice, access occurs through customs declaration. Importers requesting allocation must correctly identify the relevant order number of the quota applicable to the selected product category and country of origin.
The Commission's quota database can be consulted through the TARIC Quota (TariffQuota) system, which allows operators to verify:
- Available quota balances.
- Order numbers.
- Applicable product categories.
- Country eligibility.
- Quota exhaustion status.
Completing the import declaration
Importers seeking quota treatment in an H1 import declaration must indicate both the appropriate tariff preference and the relevant quota order number. These data elements allow customs authorities to manage the allocation within the applicable tariff quota.
| Data element | Purpose | Value to be declared |
|---|---|---|
| DE 14 11 001 000 | Tariff preference | 320 where the goods qualify under the FTA quota component; 120 where no FTA entitlement applies |
| DE 99 01 001 000 | TARIC quota order number | Quota order number corresponding to the applicable tariff quota (e.g. 09.9801 for Turkey under category 1A) |
Operators should not assume automatic cascading between levels: when a quota level is exhausted, a new H1 must be submitted with the next applicable order number. It is advisable to have contingency plans for alternative suppliers or timing.
As quota order numbers differ by product category, country of origin and quota mechanism, operators should verify the applicable reference before submitting the import declaration. The European Commission's TARIC Quota Consultation database provides access to quota order numbers, available balances and quota status: TARIC Quota Consultation.
Failure to declare the correct quota order number may result in the shipment being processed outside the quota, potentially triggering the additional 50% ad valorem safeguard duty as provided for in cases where the applicable quota is unavailable or has been exhausted.
Returned EU steel may not keep its duty-free status
The new regime may also affect certain movements involving Union goods. Under the new framework, steel manufactured in the EU, exported, and then re-imported without significant processing that loses its Union status is treated like third-country steel, meaning it falls under the quota and the 50% out-of-quota duty.
Outward processing remains a defined customs exception, but a simple return without transformation sits fully within the measure. The aim is to stop temporary exports being used to circumvent the rules.
What to expect next
- The current quota allocations apply from 1 July to 31 December 2026, and the Commission will assess whether quota volumes, country allocations or management arrangements need to be adjusted for the following period.
- One of the most significant developments concerns the implementation of the “melt and pour” principle: From 1 October 2026, at the time of importation, importers of products listed in Annex I must provide adequate verifiable evidence of the ‘melt and pour’ country, that is, the country where the steel or iron was initially produced in liquid form and first cast in a solid state. The mill test certificate is an example of documentation accepted under the Regulation.
The Commission must specify the type of proof required by means of an implementing act, to be adopted by 31 August 2026.
- The Commission will also continue to monitor quota utilisation and market developments, including the operation of the carry-over mechanism for unused quarterly quota volumes during the first year of application. In addition, a review is planned by June 2027 to assess whether the scope of the regime should be extended to certain products manufactured from steel or containing significant amounts of steel.
Direct channel for enquiries
The European Commission has opened a dedicated mailbox for operators' questions on managing the steel quotas: [email protected]. It is the most direct route for case-specific queries on order numbers, allocation and declaration handling during the first months of the regime.
Further Information
- Regulation (EU) 2026/1384 of the European Parliament and of the Council: Regulation (EU) 2026/1384
- Implementing Regulation (EU) 2026/1457 of the Commission: Implementing Regulation (EU) 2026/1457
- Questions and answers on the tariff quota distribution for steel imports: European Commission Q&A
- New rules to protect the EU steel industry (press release): European Commission press release
- EU safeguard measures overview: EU safeguard measures
- New EU safeguards on steel imports from third countries: Access2Markets