EU Aluminium Industry Calls for 30% Scrap Export Levy to Safeguard Strategic Supply Chain

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Summary:

European aluminium producers are urging the European Commission to impose a 30% export duty on aluminium scrap to secure domestic supply, citing rising exports to Asia and market distortions caused by U.S. tariffs and global subsidies....

Rising Scrap Outflows Threaten Domestic Industry

The European aluminium sector is intensifying its call for decisive regulatory action as scrap metal exports from the bloc reached an unprecedented 1.26 million metric tons in 2024 marking a 50% increase over the past five years. Most of this material has been flowing to Asia, where demand is surging due to rising industrial activity and reduced access to U.S. scrap. European Aluminium, the leading industry body, warns that this growing outflow is eroding the competitiveness and strategic resilience of the EU’s domestic producers.

The pressure to act has intensified following policy shifts in the United States. Under President Donald Trump, aluminium import tariffs were set at 50%, while scrap was taxed at only 15%. This discrepancy altered trade flows by making scrap more attractive to U.S. buyers while discouraging scrap exports. As a result, Asian markets no longer able to depend on U.S. supply have increasingly turned to Europe to fill the gap. This is not a coincidental shift but a causal chain triggered by U.S. policy that is now distorting global scrap markets.

Calls for EU Intervention

European Aluminium, alongside the steel industry association Eurofer, is lobbying the European Commission to introduce a 30% export duty on aluminium scrap. Their argument rests on the premise that public policy should intervene to correct price-driven market imbalances, especially when those imbalances undermine Europe’s industrial and environmental goals. Director General Paul Voss emphasized that Asian buyers benefit from state subsidies and looser environmental regulations, allowing them to offer higher prices and lure away critical inputs. Without a levy, European companies are forced to compete on unequal terms, risking underutilization of recent investments.

Aluminium scrap is not merely a raw material it is central to Europe's decarbonization agenda. Recycling aluminium consumes 95% less energy than producing new metal from mined bauxite. Over €700 million has already been invested by European firms to increase recycling furnace capacity to 12 million tons. Losing access to adequate scrap volumes could, therefore, derail Europe’s broader climate targets and industrial transition.

The European Commission has started monitoring export volumes as of July and is expected to release an assessment by the end of Q3 2025. However, resistance remains. EuRIC, a recycling industry body, opposes the proposed levy, citing weak domestic demand and the lack of processing infrastructure for certain mixed scrap forms such as vehicle-derived material. This perspective suggests a correlational, rather than purely causal, relationship between low recycling capacity and high exports. For EuRIC, the issue lies in domestic inefficiencies rather than export incentives alone.

Global Precedents for Export Control

Supporters of the export duty point to the fact that 48 countries, including major producers like China and India, already impose restrictions on ferrous scrap. Such restrictions are framed as necessary steps for protecting industrial autonomy and securing critical inputs for domestic manufacturing.

The European Commission now faces a decision that will shape the future trajectory of its metals industry. Whether it prioritizes free trade and market efficiency or strategic autonomy and climate objectives will determine the fate of the proposed 30% export levy. Regardless of the outcome, the debate underscores a deeper reckoning: the tension between global market forces and domestic resilience in a world increasingly shaped by industrial policy.

Source: Reuters

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