EU Electrical Steel Curbs Raise Transformer Costs

21 September 2026

Executive Summary

The European Union is introducing new safeguards on imports of specialist electrical steel and transformer components, creating a potential cost and procurement risk for businesses involved in electricity infrastructure, renewable energy and industrial electrification.

The European Commission announced provisional safeguards covering grain-oriented electrical steel, commonly known as GOES.

The material is critical in the manufacture of power transformers used throughout electricity transmission networks.

Significantly, the measures extend beyond the raw steel itself.

They also cover:

• Electrical steel laminations.
• Transformer cores.
• Cores already incorporated into transformers.

The measures introduce tariff-rate quotas combined with minimum price thresholds.

For electrical steel itself, minimum prices within quotas range from approximately €2,800 to €3,400 per tonne, rising to approximately €3,500 per tonne for volumes above the quotas.

The safeguards are provisional while the Commission continues its investigation.

The significant development is that European trade protection is moving further down the manufacturing chain rather than stopping at the raw material.

UK Impact

The UK is outside the European Union, but UK businesses remain closely connected to European electricity and manufacturing supply chains.

Potential exposure exists across:

• Transformers.
• Grid infrastructure.
• Renewable energy.
• Wind farms.
• Industrial electrical equipment.
• Data centres.
• Rail infrastructure.
• Large construction projects.

Changes in EU import economics could redirect Asian products towards other markets, including the UK.

Alternatively, European manufacturers facing higher input or component costs could pass those costs through to UK customers.

Global Impact

China represented more than 50% of EU imports of electrical steel and related downstream products in 2025.

Imports from China, Japan, Russia, South Korea and the United States have previously been subject to EU anti-dumping measures.

The new safeguards reflect wider concern within Europe over global industrial overcapacity and the ability of European strategic manufacturers to compete with lower-cost imports.

Electrical steel has particular strategic importance because transformers are essential to:

• Power generation.
• Electricity transmission.
• Renewable-energy connections.
• Industrial electrification.
• Grid expansion.

Transformer supply chains have already faced long manufacturing lead times internationally.

Changes affecting specialist steel and transformer cores therefore have implications beyond the steel industry itself.

Our View

Businesses involved in electricity-intensive projects should map transformer procurement as a strategic dependency.

Companies should ask:

• Where are transformers manufactured?
• Where are transformer cores manufactured?
• Where does the electrical steel originate?
• Are components entering the EU?
• Could new quotas affect supply?
• Could minimum prices increase project costs?
• Are existing orders contractually protected?
• Can suppliers pass additional costs through?
• Are transformer delivery dates guaranteed?
• How long are replacement lead times?
• Are alternative manufacturers approved?
• Could products be redirected towards the UK?
• Are infrastructure budgets sufficiently flexible?
• Could delayed transformers delay project completion?
• Does delay-in-start-up insurance respond?
• Are grid-connection dates dependent upon equipment delivery?

There is a wider procurement lesson.

Trade restrictions increasingly follow the value chain.

Moving from importing a protected raw material to importing a finished component does not necessarily remove the exposure if governments extend protection downstream.

Risk Indicator: HIGH – EU TRADE, TRANSFORMERS & POWER INFRASTRUCTURE

Disclaimer

The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.

Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.