EUROFER and European Aluminum call for action on scrap leakage

The European Steel Association (EUROFER) and European Aluminium have issued a joint statement calling on the European Commission to address the problem of scrap leakage.

According to the industry associations, the volume of scrap processed in the region is falling due to an increase in its external supply.

Exports of ferrous scrap from the EU, according to the statement, increased from 9.14 million tons in 2015 to 18.92 million tons in 2023. Exports of aluminum scrap have reached about 1 million tons annually in recent years, and in 2023 amounted to 1.2 million tons. A new record is expected by the end of 2024 – more than 1.3 million tons.

Among the main reasons for the leakage, the association cites higher prices paid by processors from third countries that view scrap as an important resource. These countries are investing heavily in increasing their recycling capacity – often with subsidies – and this creates additional unfair market competition and overcapacity to the detriment of European competitiveness.

The associations point out that increasing the recycling of aluminum and steel in Europe is crucial not only for the decarbonization of their value chains, but also for achieving the EU’s circular economy goals. Recycling can save up to 95% and 80% of the energy required for primary aluminum and steel production, respectively.

“Aluminum scrap and ferrous scrap are strategic secondary raw materials for the EU economy and tools for achieving the EU’s goals. We believe that the importance of their role can be emphasized and utilized in the future Circular Economy Law,” the statement said.

EUROFER and European Aluminium call on the EU to consider the approach proposed in Mario Draghi’s report – measures to restrict scrap exports to those third countries that have imposed export restrictions on their critical raw materials.

They also propose to use the EU’s Foreign Subsidies Regulation, the Waste Transport Enhancement Regulation, and the Critical Raw Materials Act to introduce a stricter scrap export regime and better control its flows. In addition, the associations recommend revising the Worn Out Vehicles Directive.

At the same time, the EuRIC Association of the Recycling Industry, following a joint appeal by steel and aluminum producers to the EC, warned against any restrictions on scrap exports.

“Scrap exports support the viability of recycling companies, serving as a counterweight to the extremely low demand for secondary raw materials in the EU,” the statement said.

Closing EU borders to scrap exports, the association believes, will have negative consequences. Recyclers are concerned about the prolonged decline in European steel and aluminum production, as it threatens Europe’s competitiveness, as well as the green and digital transition. According to EuRIC, any calls by European metal producers to limit these exports are unjustified. They believe that the supply of recycled scrap has never been the reason for the decline in activity of EU enterprises.

The Association called on European politicians to maintain open trade and carefully consider the contribution of the EU’s recycling industry to the economy and sustainable development of the bloc, as well as to support only those measures that encourage continued innovation and resource generation.

According to BIR, the EU increased its scrap consumption by 8.8% year-on-year to 43.61 million tons in the first half of 2024. Exports of this raw material from the EU countries in the first half of the year decreased by 18.7% y/y – to 7.36 million tons.