Requests Concerning the Industrial Accelerator Act (IAA) proposed by the European Union (EU)

November 10, 2026

The Japan Iron and Steel Federation
Special Steel Association of Japan
Japan Stainless Steel Association
Japan Wire Products Association
Non-Integrated Steel Producers’ Association

 

In March of this year, the European Union (hereinafter “EU”) published the European Commission’s draft of the Industrial Accelerator Act (hereinafter “IAA”). With the aim of creating demand for low-carbon and domestically produced goods, strengthening industrial competitiveness, and enhancing economic security, the act targets energy-intensive industries (such as steel, aluminum, and cement), the automotive industry, and net-zero technology industries (renewable energy, energy storage, transportation, etc.). The proposal would introduce mandatory minimum shares of low-carbon and EU-origin products, including a requirement that at least 25% of steel used be low-carbon steel as defined by the EU.
Furthermore, in September of the same year, a draft report by the European Parliament was published that would tighten these requirements; specifically, it would mandate both: (1) an increase in the low-carbon requirement (i.e., a phased increase in the mandatory use of low-carbon steel from 25% in 2029 to 50% in 2036) and (2) the use of steel of EU origin (i.e., steels melted and poured within the EU, with at least 75% of the primary iron input reduced within the EU). The European Parliament and the Council of the European Union are aiming to finalize their respective proposals by the end of the year, and the legislation is expected to be adopted by the European Union as early as next spring.

Depending on the final content of this legislation, in addition to the direct impact of a decline in steel products exported from Japan to the EU (approximately 700,000 metric tons per year), indirect exports via automobiles, industrial machinery, and electrical machinery exported from Japan to the EU (approximately 1.7 million metric tons per year) are also expected to decrease significantly. The Japanese steel industry is deeply concerned that this will not only severely undermine the domestic production and revenue base of Japan’s steel industry but will also have a serious impact on the entire supply chain—from Japan to European customers and industries—due to the disruption of both direct and indirect supplies of Japanese steel products.

Coincidentally, in July of this year, the EU introduced a regulation—as a successor measure to the comprehensive safeguard (hereinafter “SG”) measures on steel products in general—that significantly reduced the total tariff rate quota established under the previous SG measures and raised the concessionary tariff rate to 50 percent, resulting in a substantial reduction in the tariff rate quota allocated to Japan. We would like to once again express our gratitude to the Japanese government for its persistent negotiations with the EU aimed at expanding Japan’s tariff rate quota. However, if this bill is enacted as is, we foresee a serious situation in which, even if the tariff rate quota is secured, exports from Japan would become impossible in the first place.

In light of this situation, the Japanese steel industry calls on the European Commission, the governments of EU member states, and the European Parliament to treat Japan as a like-minded partner that shares the EU’s values. Specifically, we request amendments to ensure that Japanese products—particularly steel—are treated on an equal footing with EU products, as well as the establishment of a definition of low-carbon steel that would allow Japan’s GX Steel to be certified as such. Furthermore, we also request the Japanese government to make every effort, in addition to the ongoing steel tariff quota negotiations, to address the negotiations regarding the IAA amendment, which could undermine the outcomes of those quota negotiations.

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