Speaking on the second day of the 19th Arab Steel Summit & International Iron and Steel Exhibition, held in Cairo, Egypt, on November 3-4, Nicole Voigt, managing director and partner at Boston Consulting Group (BCG), examined the implications of the European Union's tightening trade regulations for global steel markets, particularly exporters in the Middle East and North Africa (MENA).
Voigt highlighted that the EU is significantly tightening access to its steel market through a combination of reduced import quotas, higher tariffs and carbon-related regulations. She explained that the new quota regime, including country-specific restrictions and additional origin requirements, would make access to the European market increasingly challenging for international steel suppliers.
New EU quotas to affect Arab steel exporters differently
According to Voigt, the impact of these measures on Arab steel exporters will vary considerably depending on individual countries, products and existing trade relationships. Referring to historical export volumes and the proposed quota allocations, she noted that more than 60 percent of Egypt's previous steel exports to the EU could remain within the new quota limits, while the corresponding shares for Saudi Arabia, Algeria and the United Arab Emirates would be below 30 percent. These differences indicate that some regional exporters could face substantially greater restrictions than others. She also emphasized that the combination of reduced quotas and higher tariffs could significantly affect the competitiveness of Arab steel producers in the European market.
Turning to the Carbon Border Adjustment Mechanism (CBAM), Voigt stressed that carbon emissions are becoming an increasingly important factor in determining the competitiveness of steel exports to Europe. However, she pointed out that the EU's steel quota system does not prioritize low-carbon products, meaning that even producers with relatively low emissions could face restrictions on their access to the European market. Consequently, compliance with carbon regulations alone would not necessarily guarantee favorable market access.
Verified emissions data key to reducing CBAM costs
Voigt also highlighted the importance of verified emissions data in determining CBAM-related costs. Using Egyptian hot rolled coil exports as an example, she demonstrated how the use of actual verified emissions rather than EU default values could substantially reduce the financial burden on exporters. According to the calculations presented, the CBAM cost for Egyptian DRI-EAF-based hot rolled coil could amount to approximately €24/mt when verified emissions data are used, compared to around €228/mt under default emissions values. For comparison, Voigt indicated a reference carbon cost of approximately €36/mt for EU-produced hot rolled coil. These calculations underline the importance of accurate emissions monitoring, verification and reporting for exporters seeking to maintain their competitiveness in Europe.
Another major development addressed by Voigt was the potential extension of CBAM to downstream steel-intensive products from 2028. She explained that while the European Commission's initial proposal covered approximately 180 additional product codes, the European Parliament's position adopted in September 2026 expanded the proposed coverage to 457 codes. With further negotiations scheduled for November 30, the final scope of the extension remained subject to discussion. Voigt noted that expanding CBAM to downstream products could significantly increase the regulatory requirements facing steel-related value chains and create additional challenges for exporters.
Regarding opportunities for Arab steel producers, Voigt discussed Europe's growing focus on low-carbon steel and industrial decarbonization. While producers with lower emissions and access to competitive energy resources may benefit from these developments, she cautioned that trade restrictions could limit their ability to capitalize on European demand. In this context, she emphasized that exporters would need to consider both the carbon intensity of their products and the increasingly complex regulatory conditions governing access to the EU market.
Voigt concluded that the combination of trade restrictions, CBAM requirements and Europe's decarbonization policies is reshaping the competitive landscape for international steel exporters. For Arab producers, maintaining access to European markets will increasingly depend on their ability to adapt to changing trade regulations, provide verified emissions data and develop strategies that address both commercial and carbon-related requirements.
