Post by : Badri Ariffin

The European Union is preparing to tighten controls on the export of aluminium scrap, a crucial raw material for the region’s metal industry, following a surge in overseas demand. The move aims to ensure domestic producers have enough supply to decarbonise production and maintain competitiveness.

Exports of aluminium scrap from the EU hit an unprecedented 1.26 million metric tons in 2024, marking a 50% rise over the past five years. Most of the metal has been heading to Asian markets, as overseas buyers increasingly rely on EU sources.

Analysts say the shift was accelerated by U.S. import tariffs: while primary aluminium faced a 50% levy, scrap metal was taxed at just 15%. This incentivised more scrap exports to the U.S., simultaneously redirecting Asian demand towards the EU.

Recognising the potential strain on domestic producers, the European Commission began monitoring aluminium scrap flows in July 2025. “We are launching preparatory work on a new measure to address the issue of aluminium scrap leakage,” said EU Trade Commissioner Maros Sefcovic. The policy, expected in spring 2026, is intended to balance the needs of producers, recyclers, and downstream industries.

Scrap metal is not only a commercial resource but also a critical factor in decarbonisation. Recycling aluminium consumes 95% less energy than producing it from bauxite ore, making availability of scrap vital for green metal production.

However, some in the recycling industry argue that EU exports reflect limited domestic processing capacity and low local demand for mixed scrap materials, such as from shredded vehicles. Without investments in handling capacity, restricting exports alone may not fully resolve supply challenges.

As Europe weighs its next steps, the balance between keeping the metal within the bloc and maintaining open trade will be closely watched by both domestic manufacturers and global markets.

#Business News #Economic