The European Commission is examining the introduction of export duties or other restrictions on aluminium scrap and invited public comment in a call for evidence and targeted consultation launched late last year. As expected, associations representing the recycling and waste management industries remain firmly opposed to the plans, while the European aluminium industry considers trade measures justified and supports their introduction.
Both Recycling Europe and the European Waste Management Association (FEAD) have again made clear to the European Commission that they oppose export restrictions and warn that these would run counter to circular economy objectives. They reject the Commission’s assertion that there is a structural shortage of aluminium scrap in the EU or excessive outflows ("leakage") to countries outside the Union.
According to Recycling Europe, the Commission’s analysis is based on erroneous or incomplete assumptions. For example, it does not sufficiently differentiate between the various types of scrap, their applications, markets and price levels, and selected 2019 as a reference year despite the fact that prices were exceptionally low at that time.
FEAD criticises the Commission for examining not the sufficient availability of aluminium scrap on the EU market as stated, "but the sufficient (financial) affordability of this material according to the views of the aluminium industry". This approach, which focuses on only one link of the value chain, "fully undermines European recyclers and waste management operators who are collecting, treating and providing the aluminium scrap", FEAD argues.
Both associations call for strengthening the competitiveness of the value chain as a whole. According to Recycling Europe, this includes addressing factors such as high energy prices and developing a coherent industrial policy along with incentives to stimulate demand for recycled materials. "Particularly, the Carbon Border Adjustment Mechanism (CBAM) must be future proofed to ensure it supports the entire EU aluminium value chain, including recycling activities," said Recycling Europe.
The Bureau of International Recycling (BIR) supports the position of its member organisation Recycling Europe and likewise warns that trade restrictions will distort markets, undermine the economic sustainability of recycling operations and deter investment. With the measures being considered, there was "a danger of turning what is currently a valuable resource into a financial burden" which increases the likelihood of abandoned or unmanaged waste streams.
Instead, BIR supports measures such as improving energy affordability, harmonising regulations, and incentivising the uptake of recycled content. However, should the Commission nevertheless opt for trade policy intervention, the association insists that any such measures must be "strictly temporary, narrowly targeted and governed by robust emergency clauses" in order to safeguard employment and investment by the organisation's members.
Aluminium Europe backs export duty
In contrast, European Aluminium, the association representing primary aluminium producers and semi-finished product manufacturers, argues that the sector is subject to unfair market practices on the international stage from China and must contend with broader price and trade distortions. It also points out that a growing number of third countries already restrict exports of aluminium scrap, including China, Vietnam, Malaysia, Indonesia, South Africa and the United Arab Emirates, while others such as the US and Mexico are discussing restrictions on strategic metal scrap.
Aluminium Europe’s preferred option is the introduction of a uniform export duty on shipments from the EU to all third countries. It argues that the duty should be set to at least 30 per cent in order to ensure a level playing field. As an alternative, the association supports the adoption of tariff rate quotas (TRQs), although these would need to be combined with strict safeguards. Aluminium Europe also notes that this approach would be considerably more complex and burdensome to administer than a uniform export duty, and should thus serve only as a fallback instrument.
At the launch of the call for evidence, the Commission said that it would analyse different scenarios and their impact on the EU aluminium supply chain. According to the timeline it presented in December, the EU authority intends to table a proposal for a regulation in the second quarter.
