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Business
Green Steel in Europe: The EU Deploys a Regulatory Arsenal to Stimulate Demand
Business Desk · · 30s summary · 4 min read
The essentials
The European Union is fundamentally reshaping its steel policy to target green steel demand rather than just supply. In early July 2026, new EU trade measures tightened restrictions on steel imports. The European Commission is preparing an Industrial Accelerator Act that would require public fund recipients to incorporate low-carbon materials in infrastructure, industrial facilities, and buildings. According to a BCG analysis shared exclusively with Handelsblatt on July 14, 2026, this policy could generate approximately 9 million tonnes of additional green steel demand per year starting in 2029.
- New EU trade measures restrict steel imports as of early July 2026
- Industrial Accelerator Act would mandate low-carbon materials in publicly funded projects
- BCG estimates ~9 million tonnes of additional green steel demand annually from 2029 onward
- Thyssenkrupp Steel and Salzgitter AG investing billions in hydrogen-based production
- First time the EU explicitly targets green steel demand, according to BCG
What we know
The European Union implemented new trade measures in early July 2026 to more strictly restrict imports of certain steel products. This tightening aims to counter rising import shares amid declining domestic demand across Europe.
In parallel, the European Commission is preparing draft legislation called the Industrial Accelerator Act (IAA), which would require recipients of public funds in infrastructure construction, industrial facilities, and buildings to integrate a specified share of low-carbon materials.
According to calculations by consulting firm BCG, shared exclusively with Handelsblatt on July 14, 2026, the IAA could generate approximately 9 million tonnes per year of additional low-carbon steel demand starting in 2029, driven by public procurement and private investment support programs.
The automotive industry is also targeted. The EU is considering stricter climate objectives for car manufacturers, backed by penalties for non-compliance. BCG calculates that these potential fines could make it economically rational for manufacturers to absorb surcharges of several hundred euros per tonne of green steel.
Context: An unprecedented approach, according to BCG
Until mid-2026, European steel policy had focused on financing production transformation—subsidies and state aid for decarbonization—without binding mechanisms explicitly targeting green steel demand.
This is the first time the EU is deliberately setting demand impulses for green steel
— Nicole Voigt, partner at BCG
Timeline
- 2021The European Commission proposes the Carbon Border Adjustment Mechanism (CBAM)—an environmental tariff establishing a carbon price on carbon-intensive products imported into the EU—as part of the Fit for 55 package.
- December 2022The CBAM is adopted in trilogue at the European level.
- Early July 2026New EU trade measures restricting imports of certain steel products come into force.
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