SteelOrbis talked to Jamie Mcleod, director at Crowe U.K. LLP on EU's trade measures and CBAM effects.
How do you evaluate the latest announcement from the EU regarding its safeguard policy?
The transition to a permanent framework for steel safeguard duties introduces several notable shifts, and the introduction of the “melt and pour” origin rule origin verification requirement may complicate compliance for UK exporters. From a UK customs and trade perspective, this poses serious risks. The EU remains the UK’s largest steel customer, accounting for 78 percent of UK steel exports in 2024. Without a carve-out for UK origin steel, British exporters could be priced out of the EU market.
The proposed quota reduction intensifies this threat. For the UK, the risk of trade diversion is also significant, and the UK’s own safeguard regime, managed by the Trade Remedies Authority (TRA), is also under review, with increased pressure on reforms as a result of the EU announcement.
Are these trade measures effective in ensuring a level playing field, or do they distort competition?
The EU’s motivation in trying to protect its steel industry from global overcapacity and subsidised imports is clear, and in principle, this is about restoring fair competition. In practice, however, trade measures like these often have unintended and nuanced consequences. Some EU manufacturers, for example, have voiced concerns about rising input costs and likely inflationary effects. So, while the measures may help upstream producers, they risk creating friction elsewhere in the economy.
Other EU trade bodies, meanwhile, are pushing for further extension of the measures to downstream products, which are currently excluded, creating potential loopholes and uneven protection across the supply chain.
It’s a complicated picture and the full impact remains uncertain. The proposal still needs to pass through the EU legislative process and WTO negotiations, both of which could take months and may result in amendments. Until then, businesses are operating in a climate of uncertainty.
What do you think the main challenges of CBAM are and what effects do you anticipate on trade flows?
CBAM continues to present significant operational and strategic challenges for businesses, and this is intensifying as we approach the definitive phase starting in January 2026, at which point a CBAM cost will come into play. One of the biggest issues remains data availability and quality. Importers must obtain detailed emissions data from third-country suppliers, many of whom lack the systems or incentives to provide it. Even with recent simplifications, such as excluding final production steps from emissions calculations, the reporting burden remains high.
Another challenge is uncertainty. Key elements like benchmark emissions values and default emissions rules are still pending, making it very difficult for businesses to forecast costs or plan contracts. The requirement for Authorised Declarant status from 2026 adds further pressure on importers to build robust compliance frameworks quickly.
In terms of trade flows, I expect some realignment of supply chains. EU importers may favour suppliers with transparent carbon data or shift sourcing to countries with recognised carbon pricing systems. Conversely, exporters unable to meet CBAM requirements may lose access or face pricing disadvantages.
From a UK perspective, the situation is evolving. The UK CBAM is due in 2027, and, while there’s political agreement on UK–EU ETS linkage, the timeline is unclear. Without an interim arrangement, UK exporters could face CBAM exposure despite regulatory alignment, potentially distorting trade until exemptions are formalised.
Do you think current EU funding mechanisms are sufficient to support green transition in steel?
While broader funding policy isn’t my area, I am particularly interested in how CBAM revenues, which in time will become highly significant, will be used - for now, this remains unclear. There are concerns that using CBAM revenues to subsidise EU producers could undermine the environmental goals of CBAM and raise WTO compatibility issues.
How do you see the balance between environmental targets and global competitiveness?
It’s a very difficult balance to strike. The EU is right to push for stronger climate action, and CBAM, the phase-out of free allowances, and tighter carbon pricing are all part of that. But the trade and competitiveness impacts are often more nuanced.
Whilst the EU has been firm in sticking to CBAM and the planned timeline, there’s a broader concern that other sustainability measures are being diluted. The delays and simplifications around the EU Deforestation Regulation (EUDR), for example, reflect growing pressure to ease compliance burdens - raising questions about consistency and ambition across the EU’s green agenda.
At the same time, the global trade environment has become increasingly volatile. With Mr. Trump back in office and actively applying tariffs, the risk of retaliatory measures and friction over climate-linked trade instruments like CBAM is real.