EU scrap export restrictions to slow investments in green aluminum: trade body

If the European Commission takes steps to restrict EU aluminum scrap exports, it will compromise investments in adjusting recycled inputs to green transition needs, while also being inconsistent with the situation, whereby aluminum metal is allowed to be traded freely, according to the European Recycling Industries' Confederation.

Metal recyclers "strongly oppose any measures, such as tariffs, that could disrupt the free trade of recycled metals, which are often wrongly referred to as 'scrap'," EuRIC told Platts, part of S&P Global Energy.

The EC is currently gathering evidence to inform its decision on potential export restrictions for recycled metals, which is expected by the end of September. European Aluminium, the trade body representing EU aluminum smelters, has spoken strongly in favor of a double-digit tariff on aluminum scrap exports.

"The European aluminium industry has recently stated that once the CBAM is fully implemented and free ETS, allowances are phased out, the cost of producing and importing primary aluminum in Europe will rise sharply. Given this context, it's no surprise that aluminum producers are keen to secure low-cost feedstock for their production to help offset rising energy costs," EuRIC noted to that motion.

Big investments expected from recyclers

EuRIC, however, warns that if export levies are put in place and artificially push prices for recycled aluminum down, the financial stability of the recycling sector could be threatened.

"With the green transition driving demand for new types of aluminum, recyclers will need to make significant investments to meet those needs. That process is already underway, but any restrictions on exports could set it back," it says.

European Aluminium argues that domestic smelters are facing a real problem with being almost priced out of their home scrap market, but EuRIC finds the claim about an aluminium scrap shortage in the EU misleading, though it has not disclosed how domestic scrap prices have changed since the US hiked its Section 232 import tariff for aluminum.

Exports to US remain small

Commenting specifically on how the tariff's now 50% rate impacts scrap outflows from Europe, EuRIC stresses that although the European industry might fear that US tariffs will lead to a significant increase in recycled aluminum exports, the real export volumes to the US remain low, at around 2,000 mt/month.

The union's net recycled aluminum exports over the first seven months of 2025 were around 660,000 mt, including 12,000 mt sold to the US, which is the equivalent of only 0.4% of all aluminum recycled in the EU in the first half of 2025, according to EuRIC.

EU uses 75%-80% of recycled tonnage

EuRIC maintains the idea that because the EU consistently recycles more aluminum than it remelts, and that it actually needs to remove excess from the market, export restrictions are plain unnecessary.

On average, 5 million mt of recycled aluminum are produced in the EU each year, and so about 5 million mt of scrap is used for this output, with the tonnage representing 75% to 80% of the total bulk recycled within the union, according to EuRIC.

These volumes have stayed quite stable over the past few years, and home demand for recycled aluminum hasn't grown much -- partly due to low industrial production in key sectors like automotive and construction, which feeds into uncertainty around the future needs of the European aluminum industry, it says.

"We now recycle more than ever, but we recycle also more than the European smelters are able to take in. So, before you don't have a significant increase in capacities, before you cannot use all the recycled scrap in Europe, any kind of door closing to exports will harm the recycling industry, which is also suffering like all industries in the world at the moment," Murat Bayram, president of German metals recycling trade group VDM, told Platts.

India seen as main buyer

"There are environmental restrictions, workforce issues and lack of technological capacity to process all the scrap in the continent," said a scrap procurement manager for a European aluminum producer, meaning that a ban on exports looks an unlikely option.

"We see big volumes leaving Europe, but mainly of lower grades, as high-grade scrap is consumed locally, and a significant point is that plenty of European scrap is exported mainly to India," he said and added that the flows to the US are not big on a net basis, and with the US dollar being weaker than 2024 -- $1.2 for Eur1 compared with $1.1 a year ago -- prices are not so tempting for the European scrap merchants to sell to the US.

European Aluminium told Platts recently that it was concerned about a threefold year-over-year jump in EU's aluminum scrap exports to the US seen in the first half of the year.

"We see high percentage increases [in those exports] because the volumes were very low beforehand," the procurement manager said. However, he has not seen any major scrap price changes recently, similar to those driven by US import tariff speculations in March.