European Aluminium irked by delay, replacement of scrap export duty

The European aluminum industry faces frustration as long-awaited scrap export measures are delayed yet again and now also substituted, its representative organization, European Aluminium, said of the Commission swapping the earlier proposed export duties for a ban on sales to non-OECD markets, now expected no earlier than 2027.

While supporting the Commission's efforts to address the issue through alternative policy instruments, European Aluminium reiterates the urgency for a trade measure with the widest possible territorial and product scope.

"Naturally, we are frustrated by the delay in bringing forward measures to address Europe's aluminium scrap leakage, given the scale and urgency of the problem," the association's Director General Paul Voss told Platts in a written comment.

The European Commission had originally aimed to unveil restrictions on aluminum scrap exports, expected to take the form of duties, in Q2 2026, but the measure was later postponed to September.

Earlier this month, it emerged that the Commission has withdrawn a targeted trade measure to prepare a delegated act under the Waste Shipment Regulation instead, which will ban exports of waste, including aluminum scrap, to non-OECD countries, with the exception of some EU candidate countries, according to the Executive Vice-President for Prosperity and Industrial Strategy of the European Commission Stéphane Séjourné.

Not industry-driven

European Aluminium told Platts it had supported the Commission's earlier plan to introduce an export duty on aluminum scrap. However, a decision was taken at the highest political level to exempt from the measure current and prospective free trade agreement partners, which would have included major destinations for EU aluminum scrap such as India. As a result, the proposed duty would have covered only about half of EU aluminum scrap exports, leading Executive Vice-President Séjourné to conclude that the instrument would not be sufficiently effective and to pursue a different approach, Kelly Roegies, a spokesperson for European Aluminium, told Platts.

"If ... Séjourné believes the problem can be addressed more effectively through other policy instruments, we can only support him and urge the Commission to put them in place as quickly as possible. There is absolutely no time to waste," said Voss.

Restrictions do not create demand

Domestic recyclers also urgently need clarity and predictability. Murat Bayram, president of the Circular Metal Association (CMA) representing European and German metal recycling industries, told Platts that companies are already preparing their business models and international trade flows for 2027, when new export provisions under the Waste Shipment Regulation will apply.

"These already include significant new obligations, such as independent audits of receiving facilities outside the EU. Yet important practical questions remain about how recyclers are expected to implement these requirements," said Bayram. "Before adding further restrictions, we should first make sure that the framework already agreed can work effectively."

Unlike European Aluminium, Bayram sees a positive signal in the Commission's decision to pull back from the export tariff option, but stresses that as they take a different tack, policymakers should take several factors into account.

"Europe's automotive and machinery industries are under enormous pressure, with production being reduced and sites being closed. If Europe produces less, it needs less recycled metal. Restricting exports does not create industrial demand," he said.

Then, scrap grades and qualities Europe exports are not necessarily those European manufacturers need, as the transformation of the automotive industry from combustion engines toward EVs is changing material requirements, according to Bayram.

"Europe will continue to need certain recycled materials from international markets, just as it will generate materials for which demand exists elsewhere. We should be very careful not to create measures that could ultimately restrict the international flows Europe itself depends on," the CMA's president said.

Non-OECD exports substantial

The OECD includes 16 non-EU member countries, but the EU was shipping there just over 22% of its 1.27 million mt/year aluminum scrap exports over 2024-25. India alone bought 100,000 mt more scrap (383,000 mt) from the EU last year than the 16 states together, according to S&P Global Market Intelligence's Global Trade Analytics Suite.

Exports outside OECD are significant in volume, with major importers India, Thailand and Pakistan among destinations, said Roegies.

Deducting 18,800 to 20,900 tons/year supplied to non-OECD candidates for EU membership, the Commission could be looking at reducing aluminum scrap exports by up to 950,000 mt or 75%, Platts estimates.

India, Thailand, Pakistan, and China, the top export destinations over the last couple of years, would incur the most losses if the EU imposes that ban. To replace shortfalls, the countries will have to source 670,000 to 750,000 mt of scrap elsewhere, based on their combined purchases from the EU in 2024-25.

The EU waste export controls are taking shape in a year when aluminum scrap prices are at their most volatile. The Platts assessment for European aluminum auto shreds peaked at Eur2,560/mt in mid-June; its Eur760 surge from the January low of Eur1,800/mt contrasts sharply with the Eur260/mt spread between the high and low prices of 2025.