Šefčovič to Parliament: no SME exemption from the Steel Regulation's 50% tariff

The European Commission will not exempt small and medium-sized enterprises from the Steel Regulation and its 50 percent out-of-quota tariff. That is the substance of the written answer EU Trade Commissioner Maroš Šefčovič gave on September 1, 2026 to parliamentary question E-003019/2026, which had asked what mechanism the Commission intends to use to shield SMEs from the combined weight of the Steel Regulation and CBAM. The answer offers small steel importers exactly one form of relief, and it sits entirely on the carbon side: the 50-tonne CBAM de minimis threshold.

What the Commission's answer says

The answer states that exempting SMEs from the Steel Regulation "is not possible" because doing so "would otherwise undermine the effectiveness of the Steel Regulation." The full sentence reads: "At the same time, as SMEs represent a significant share of EU operators active in the steel sector, it is not possible to exempt them from the application of the Steel Regulation. This would otherwise undermine the effectiveness of the Steel Regulation."

The reasoning is volume based. Because SMEs account for a significant share of EU steel-sector operators, an SME carve-out would leave a hole in the tariff wall large enough to defeat its purpose. The answer opens by restating the Commission's position from an earlier exchange: CBAM and Regulation (EU) 2026/1384 (the Steel Regulation) are "two distinct measures with different policy objectives and legal basis" that "apply independently from one another to EU companies, including small and medium-sized enterprises (SMEs)."

On the carbon side, the answer points to the one relief that does exist: "Please note that the CBAM simplification provides that importers with annual CBAM-covered imports of up to 50 tonnes will fall outside the scope of CBAM. Hence, the vast majority of EU small importers will not be subject to CBAM obligations." The mechanics of that threshold are covered in our guide to the 50-tonne de minimis rule.

The question behind the answer

Non-attached MEP Fernand Kartheiser submitted question E-003019/2026 on July 16, 2026, after judging the Commission's May 26 reply to his earlier question E-001234/2026 unresponsive. His follow-up conceded that CBAM and steel tariffs are legally distinct, then argued that the burden on SMEs "arises from the simultaneous application of CBAM and steel tariffs" on the same import transaction. He put three questions to the Commission:

1. What specific mechanism the Commission intends to use "to avoid the double burden of CBAM and steel tariffs on SMEs", given the cumulative effect on the same import transaction.
2. Why SMEs remain subject to this combined burden "rather than being explicitly exempted from it", despite specific proposals submitted to the Commission.
3. Why the new country-specific quotas cut some origins and products so deeply that "only 25 % of the quantities still available under the safeguard measure remain", corresponding neither to 2013 levels nor to 2022-2024 market shares.

The answer to the first two questions is the refusal quoted above. The answer to the third is a methodology defense, covered below.

Steel Regulation and CBAM: two separate regimes, one importer

The Steel Regulation and CBAM impose separate costs through separate mechanisms, and only importers above the 50-tonne CBAM threshold who also import beyond an exhausted quota face both at once. The distinction matters because parts of the trade press have compressed the two regimes into a single "double payment", which is not how either instrument works. The table below separates them.

Three importer situations follow from this structure:

• Below 50 tonnes of CBAM goods per year: outside CBAM scope entirely, but every steel import still runs through the Steel Regulation's quota system, and out-of-quota volumes pay the 50 percent duty.
• Above 50 tonnes, importing within an open quota: full CBAM obligations (authorization, declaration, certificates from February 1, 2027), no out-of-quota duty.
• Above 50 tonnes, importing after quota exhaustion: full CBAM obligations plus the 50 percent duty on the out-of-quota volume.

Kartheiser's "same import transaction" framing describes the third situation. The Commission's response does not dispute that the costs can coincide; it states that the coincidence is the product of two independently justified instruments.

The exchange landed in a hostile press environment. steelnews.biz, which has campaigned against the cumulative burden since late April, wrote in its September 2 coverage that the damage to SMEs is intended rather than accidental, and cited Eurostat 2023 data putting SMEs at 38.6 percent of import value. Both the characterization and the figure are the outlet's own, not the Commission's.

How the Commission defends the quota cuts

The answer explains the quota levels as 2013 import market shares applied to 2024 EU steel consumption, subdivided into 30 product categories by 2022-2024 import shares. In the Commission's words, the tariff-rate quotas "were calculated by taking as a reference the market shares of the imports into the EU in 2013 for the overall consumption in the EU steel market in 2024", with 2024 chosen as "the latest year for which complete data was available". Country-specific quotas then followed "a common methodology rooted in several criteria, including the average 2022-2024 imports and additional TRQs made available to preferential partners of the EU".

That is the whole explanation for cuts that, per Kartheiser's question, leave some origin-product combinations with a quarter of their former safeguard volumes. The total quota volume of 18,345,922 tonnes per year is roughly half of the tariff-free quota volume available under the safeguard it replaces, an average cut of 47 percent, which is why individual allocations can fall so far below the 2022-2024 averages that importers planned around.

What SME steel importers should do now

SME importers should establish which side of the 50-tonne line they sit on, then plan quota timing and CBAM compliance as two separate workstreams. Four steps cover the near term:

1. Total your expected 2026 imports of CBAM goods other than electricity and hydrogen, which sit outside the de minimis. Under 50 tonnes, CBAM drops away and the Steel Regulation is your only new cost layer.
2. Track quota exhaustion for your product categories and origins, since the 50 percent duty applies only to out-of-quota entries.
3. Prepare for the melt-and-pour documentation requirement, which the Steel Regulation applies from October 1, 2026 with evidence such as mill test certificates.
4. If you are above 50 tonnes, collect emissions data from your suppliers now; the supplier data request generator produces the request letter, and the September 2026 CBAM calendar lists the compliance dates running to the end of the quarter.

The political pressure that produced this exchange is not receding. In August, a coalition of 500 signatories demanded downstream CBAM expansion while a protest convoy of steel processors headed for Brussels, and SME associations have kept the cumulative-burden argument in front of the Commission since the Steel Regulation was published in June. The September 1 answer makes the Commission's position explicit: the argument is heard, and the answer is no.