A new report from the European Jacques Delors Institute warns that the EU’s steel strategy risks creating a tangled "green spaghetti bowl of regulation", complicating global trade and undercutting decarbonization abroad.

While attention has centered on the Carbon Border Adjustment Mechanism (CBAM), the analysis highlights three other critical pillars: a voluntary low-carbon steel label that could morph into a trade barrier; stringent sustainability rules under the ESPR (Ecodesign for Sustainable Products Regulation) that impose high compliance costs and restrict scrap exports; and a proposed permanent safeguard slashing quotas by 47% and imposing 50% tariffs on excess imports.

Taken together, these measures could layer CBAM charges, ESPR costs, and high tariffs onto a single shipment, dulling the incentive for overseas producers to invest in greener steel. 

The paper urges the EU to adopt an integrated, steel-focused dialogue and form dedicated task forces to prevent trade defenses from stifling low-carbon imports.