European Commission Unveils Controversial ScrapExport Restrictions
The European Union has taken a bold step that couldfundamentally reshape global scrap metal markets. In March 2025, the EuropeanCommission approved its Steel and Metals Action Plan, which explicitly statesthe Commission will consider implementing additional scrap export restrictionsby the third quarter of 2025. These measures may include export duties andother limitations on scrap metal leaving European borders
Industry analysts suggest these restrictions are part of abroader strategy to secure critical raw materials for Europe's steel industrywhile supporting its ambitious decarbonization goals. The plan comes amidgrowing concerns about global steel overcapacity, particularly from Asianproducers, and elevated energy costs that have put European steelmakers at acompetitive disadvantage.
Strategic Resource for Decarbonization
Scrap metal has transformed from a waste management issueinto a strategic resource for industrial decarbonization efforts. Usingrecycled scrap in steelmaking can reduce carbon emissions by up to 70% comparedto primary production methods. As pressure mounts on industries to reduce theircarbon footprint, access to sufficient quantities of high-quality scrap hasbecome increasingly critical.
"We cannot afford any more delays. Decarbonizationequals long-term competitiveness," notes Irene Domínguez, Policy Managerat Bellona, highlighting the strategic importance of scrap in the transition togreener steel production. The European Commission plans to set targets forrecycled steel and aluminum in key sectors and assess whether more productsshould incorporate minimum recycled content requirements.
Industry Pushback Against Export Controls
The proposed restrictions have sparked significantopposition from recycling industry stakeholders. In a joint statement, theEuropean Recycling Industries' Confederation (EuRIC) and the Bureau ofInternational Recycling warned that export restrictions and duties "riskdisrupting global recycling markets and undermining the circular economyprinciples the EU claims to champion."
Recyclers argue that restricting exports won't solve thesteel industry's fundamental challenges but will instead break Europeanrecycling systems that have been built around global trade flows. They point toprevious examples where export restrictions led to market distortions andreduced collection rates.
Global Trend Toward Protectionism
The EU's move appears to be part of a growing global trend.According to GMK Center analyst Andrii Glushchenko, "Introduction of scrapexports restrictions becomes a new trend." The EU had already adoptedchanges to its Waste Shipment Regulation in March 2024, limiting exports ofnon-hazardous waste, including scrap, to non-OECD countries, with new rules setto take effect in May 2027
These measures reflect growing concerns about resourcesecurity and strategic autonomy in critical materials. As more countries viewscrap as essential to their industrial and environmental policies, the era offree global trade in scrap metals may be drawing to a close. China, Japan, andseveral other nations have already implemented various forms of scrap exportcontrols.
Steel Industry Support for Restrictions
While recyclers oppose the measures, European steelmakershave largely welcomed the action plan. EUROFER, representing European steelproducers, called it "the right diagnosis" and "the rightdirection" for addressing the industry's challenges.
The steel industry faces multiple existential threats,including global overcapacity, high energy costs, and the massive investmentrequired for decarbonization. Access to sufficient quantities of scrap metal isviewed as essential for both economic survival and meeting climate goals.
Balancing Environmental Goals and MarketPrinciples
Policy experts caution that a careful balance must bestruck between securing strategic resources and maintaining functioningmarkets. Bellona notes that "when it comes to the eventuality of scrapexport restrictions, caution and thorough consideration is warranted."
The Commission's plan includes a broader set of measuresbeyond export restrictions, including potential carbon border adjustments,support for research and innovation in recycling technologies, and efforts toimprove scrap quality and collection rates within Europe.
Economic Implications for Global Markets
The potential restrictions could significantly impactglobal scrap prices and trade flows. If implemented, European export duties orquotas would likely depress domestic scrap prices while driving upinternational prices as supply tightens. Developing nations that rely onimported scrap could face higher costs and supply challenges.
Meanwhile, European steel producers would benefit fromincreased availability and potentially lower costs for this critical input.However, recyclers warn that artificially depressed prices could ultimatelyreduce collection rates and undermine circular economy objectives.
Key Takeaways:
• The EU plans to consider scrap metal export restrictionsby Q3 2025, potentially ending the era of free global trade in this strategicresource.
• Recycled scrap is increasingly viewed as essential forsteel industry decarbonization, reducing CO₂emissions by up to 70% compared to primary production.
• Industry groups are divided, with steel producerssupporting restrictions while recyclers warn of disruptions to global marketsand circular economy principles.
