Japan Steelmakers Warn EU Industrial Act Could Restrict Trade
Japan's steel industry is urging the European Union to revise its proposed Industrial Accelerator Act, warning that tighter low-carbon and European-origin requirements could restrict Japanese steel exports and disrupt manufacturing supply chains linking Japan and Europe.
- Five Japanese steel industry associations issued a joint request to the EU on November 10.
- Japan exports approximately 700,000 tonnes of steel products directly to the EU each year.
- Another estimated 1.7 million tonnes of Japanese steel reaches Europe indirectly through vehicles, machinery and electrical equipment.
- The European Parliament draft would phase the required low-carbon steel share from 25% in 2029 to 50% in 2036.
- Japanese producers want Japan's GX Steel to qualify under the EU's definition of low-carbon steel.
MONTREAL (SteelPrices): Japanese steelmakers are warning that Europe's push to strengthen domestic manufacturing could create new barriers for Japanese steel and for products made with Japanese steel.
Five industry groups, led by the Japan Iron and Steel Federation, issued a joint statement on November 10 calling for changes to the European Union's proposed Industrial Accelerator Act, or IAA.
The groups said the legislation could restrict access to the European market if Japanese steel is excluded from low-carbon or European-origin requirements attached to public procurement and government support.
The statement was issued by the Japan Iron and Steel Federation, Special Steel Association of Japan, Japan Stainless Steel Association, Japan Wire Products Association and Non-Integrated Steel Producers' Association.
Japan Says More Than Steel Exports Are at Risk
Japan currently exports approximately 700,000 tonnes of steel products directly to the European Union each year, according to the joint industry statement.
But the Japanese steel industry says the potential exposure is considerably larger when steel contained in finished manufactured products is included.
It estimates that another 1.7 million tonnes of Japanese steel reaches the EU indirectly through automobiles, industrial machinery and electrical equipment exported from Japan.
The associations warned that tighter eligibility rules could therefore affect not only steelmakers but also Japanese manufacturers and their European customers.
The Bigger Risk Is the Steel Hidden Inside Finished Products
The dispute is not only about coils, sheet or other steel shipped directly from Japan to Europe. Japanese steel also enters the EU inside cars, machinery and electrical equipment.
- Direct steel exports: about 700,000 tonnes/year
- Indirect steel in finished goods: about 1.7 million tonnes/year
- Combined exposure: about 2.4 million tonnes/year
SteelPrices calculation: Adding the Japanese industry's estimates for direct and indirect flows gives approximately 2.4 million tonnes of steel exposure to the EU market each year.
That does not mean all 2.4 million tonnes would automatically disappear under the IAA. It shows why Japan views the legislation as a supply-chain issue rather than simply a steel import issue.
What the EU Industrial Accelerator Act Would Do
The European Commission presented its Industrial Accelerator Act proposal on March 4, 2026.
The legislation is designed to stimulate demand for lower-carbon products, strengthen European industrial capacity and reduce strategic supply-chain dependencies.
For steel used in covered public procurement and public-support schemes, the Commission proposal includes a minimum low-carbon share of 25% from 2029.
A European Parliament draft published in September would go further.
According to the Japanese industry statement, the Parliament proposal would gradually raise the required share of low-carbon steel from 25% in 2029 to 50% in 2036.
It would also add an EU-origin requirement for steel.
Under the draft definition cited by the Japanese associations, qualifying EU steel would need to be melted and poured inside the European Union, with at least 75% of the primary iron input reduced within the bloc.
Japan Wants GX Steel Recognized as Low Carbon
Japanese producers are asking EU policymakers to treat Japan as a like-minded trading partner rather than placing its steel on the same footing as products from countries considered strategic trade risks.
The industry is seeking two main changes.
First, it wants Japanese steel and other qualifying Japanese products to receive treatment equivalent to EU-origin products under the IAA.
Second, it wants the EU's eventual low-carbon steel definition to allow Japan's GX Steel products to qualify.
The Japanese associations argue that excluding those products could penalize steel made under credible decarbonization programs even when it meets comparable environmental objectives.
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Steel Import Quotas Add Another Layer of Pressure
The IAA dispute comes as Japan is already negotiating with the EU over access to the European steel market.
In July, the EU introduced a new steel trade regime that reduced the bloc's annual tariff-free import quota by 47% to 18.3 million tonnes and imposed a 50% duty on shipments above the applicable quotas.
The Japan Iron and Steel Federation said Japan's own tariff-rate quota was reduced substantially under the new system.
Tokyo is currently negotiating with Brussels for greater quota access.
The Japanese steel industry warned that those negotiations could lose much of their value if Japan secures additional tariff quota but its steel is later excluded from projects or support programs under the Industrial Accelerator Act.
Japan Is Not Alone in Raising Concerns
Japan is not the only major industrial supplier asking Brussels to rethink the scope of the proposed "Made in Europe" provisions.
The UK's Society of Motor Manufacturers and Traders has also warned that excluding British-made vehicles and components from qualifying EU programs could damage deeply integrated European supply chains.
SMMT estimates that the UK-EU automotive trading relationship is worth approximately €80 billion annually and has called for the UK to be treated as a trusted partner under the IAA.
The similarities are important: both Japan and the UK are arguing that industrial policy designed to strengthen European manufacturing could have unintended consequences if it cuts established allied suppliers out of tightly integrated supply chains.
The IAA Is Still a Proposal
The final rules have not yet been adopted.
The European Parliament and the Council are still developing their respective positions on the Industrial Accelerator Act.
The Japanese steel associations said the EU institutions are aiming to advance their positions by the end of 2026, with adoption potentially possible in 2027.
The final treatment of third-country steel, low-carbon definitions and EU-origin requirements therefore remains subject to negotiation.
For Japanese producers, the key issue is whether the EU ultimately creates a pathway for trusted trading partners whose steel meets comparable low-carbon standards.
Sources: Japan Iron and Steel Federation joint industry statement; European Commission Industrial Accelerator Act proposal; European Parliament draft reporting.
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