The European Steel Association (Eurofer) and European Aluminium have urged the European Commission to take decisive action to curb "scrap leakage," emphasizing the critical role of steel and aluminium in meeting the EU's sustainable development and industrial competitiveness goals.
The Call for Scrap Export Restrictions
Steel and aluminium producers are advocating for limits on scrap exports, warning that the current trend threatens the EU's climate and circular economy objectives. Scrap recycling significantly reduces energy consumption—up to 95% for aluminium and 80% for steel—compared to primary production.
In 2023, steel scrap exports more than doubled compared to 2015 levels, reaching 19 million tonnes. Similarly, aluminium scrap exports are expected to set a record in 2024, with projections of 1.3 million tonnes, up from 1.2 million tonnes in 2023.
Eurofer and European Aluminium argue that retaining these materials within Europe is vital to powering clean technologies like wind turbines, solar panels, and batteries, as well as supporting critical sectors such as aerospace and defense.
Compounding Challenges from CBAM
The call for restrictions follows the EU’s implementation of the Carbon Border Adjustment Mechanism (CBAM), which targets imports from countries with less stringent carbon emission standards. While CBAM aims to level the playing field for European producers, it has also disrupted foreign markets.
Addressing Global Competition
A significant driver of scrap leakage is the higher prices offered by third-country recyclers, such as those in China, which has rapidly expanded its recycling capacity. China’s steel scrap recycling surged from 8 million tonnes to 21 million tonnes, with plans to increase by an additional 26 million tonnes by 2030.
Eurofer and European Aluminium propose using regulatory tools like the Waste Shipment Regulation, Critical Raw Materials Act, and End-of-Life Vehicles Directive to counter unfair competition fueled by foreign subsidies and lower environmental and labor standards.
Industry Opposition
Not all stakeholders agree. The Association of German Metal Traders and Recyclers (VDM) warns that protectionist measures could backfire. "Economic bans and restrictions do not inspire innovation or drive sustainability – they create inefficiencies, reduce competitiveness, and weaken industries over time," the VDM stated.
The debate underscores the tension between ensuring Europe's industrial resilience and navigating global market dynamics, with implications for the future of sustainable development and trade policies.
