EUROFER, European Aluminium call for curbs on scrap exports

• Retaining scrap to help boost EU's decarb goals
  
  
• Indian steel, aluminium sectors to be hit hard
  
  

European Aluminium and EUROFER, representing the aluminium and steel value chains in Europe, have urged the European Commission to take immediate measures to address the growing issue of scrap leakage. The associations emphasised that the unchecked export of aluminium and ferrous scrap is undermining the EU's green transition, strategic autonomy, and circular economy objectives.

Why is this a concern for India?

India's ability to import scrap from the EU-27 faces significant hurdles after the European Union's Waste Shipments Regulation (WSR) revision on 11 April 2024. The updated rules could disrupt the flow of ferrous and non-ferrous scrap, vital to India's metal recycling industries, posing challenges for small and large manufacturers.

As per data maintained by BigMint, India utilised approximately 34.2 million tonnes (mnt) of steel scrap in CY'24, with about 8.4 mnt imported, primarily from the US, UK, and EU-27.

In CY'24, EU-27 supplied 10-12% of India's ferrous scrap and 23% of non-ferrous scrap, including key grades of aluminium, copper, and stainless steel scrap. With the new rules in place, smaller steel producers, who depend heavily on imported scrap, are likely to be affected. Meanwhile, India's growing aluminium sector, which sources nearly 90% of its aluminium scrap from abroad, faces similar risks.

Role of steel, aluminium in Europe's green transformation

Steel and aluminium are critical materials for clean energy technologies, including wind turbines, solar panels, batteries, and power grids. They also play a pivotal role in key sectors such as digital technology, aerospace, and defence, contributing to the EU's resilience and independence. Recycling these materials is a cornerstone of decarbonisation, with aluminium recycling saving up to 95% of the energy required for primary production and steel recycling saving around 80%.

EUROFER and European Aluminium stressed that retaining and enhancing recycling capacity within the EU is essential for achieving decarbonisation and circular economy goals. These materials are strategic secondary raw materials, vital for reducing emissions and supporting the EU's industrial competitiveness. The associations also called for their importance to be highlighted in the upcoming Circular Economy Law.

Scrap exports threaten EU's recycling capacity

The increasing export of scrap materials is a major concern. Ferrous scrap exports surged from 9.14 mnt in 2015 to 18.92 mnt in 2023, peaking at 19.43 mnt in 2021. Aluminium scrap exports have grown similarly, to 1.2 mnt in 2023 and are expected to exceed 1.3 mnt by the end of 2024.

This trend significantly reduces the volume of scrap available for recycling within the EU, undermining goals to decarbonise the steel and aluminium industries. EUROFER estimates that retaining 2023's ferrous scrap exports within the EU could save 32 mnt of CO2 emissions and 87 terawatt hours (TWh) of primary energy, equivalent to the electricity consumption of countries such as Denmark or Slovakia. Similarly, the aluminium scrap exported annually represents the energy demand of a country such as Hungary.

Unfair competition from third countries

The high prices offered by recyclers in third countries, such as China, India, Thailand, and Malaysia, are a major driver of scrap exports. These nations view scrap as a critical resource to expand recycling capacity, reduce carbon emissions, and lower production costs. Many benefit from subsidies, lower labour and environmental standards, and reduced energy costs, creating an uneven playing field that undermines Europe's competitiveness.

China, for example, has expanded its aluminium recycling capacity from 8 mnt to 21 mnt and plans to add another 26 mnt of ferrous scrap recycling capacity by 2030. Such rapid growth in third-country recycling capabilities highlights the need for stronger EU measures to retain valuable scrap resources.

EUROFER, European Aluminium's recommendations

• Implement reciprocal measures, as outlined in the Draghi report, to limit scrap exports to countries that impose restrictions on their raw material exports.
  
  
• Leverage the recently adopted Foreign Subsidies Regulation to address unfair competition.
  
  
• Strengthen enforcement of the Waste Shipment Regulation and Critical Raw Materials Law to better monitor and control scrap exports.
  
  
• Revise the End-of-Life Vehicles Directive to curb illegal exports and increase the supply of scrap within the EU.
  
  

Risks of inaction

EUROFER and European Aluminium warned that continued scrap leakage would undermine Europe's decarbonisation, strategic autonomy, and industrial competitiveness.

Retaining scrap within the EU would not only support the green transition but also enhance energy security and industrial resilience.

The associations urged the Commission to take immediate action to prevent long-term damage to Europe's industries and competitiveness. Amid rising geopolitical tensions, safeguarding the EU's industrial backbone is critical to ensuring its economic and environmental goals are met.