Many associations in the European Union (EU) have urged the imposition of export duties on aluminium scrap, especially after a heightened demand from the US, following its exclusion from Trump’s 50 per cent tariff, it is led to a decline. Based on it, the EU’s carbon emission goals might be affected, especially with CBAM to be implemented within the next 6 months, creating tension in the secondary aluminium production.
With Trump's 50 per cent tariff on imported aluminium and steel, European metal producers indicate a shortage in their scrap inventory, but surge in demand has inflated the prices. Owing to this, European Aluminium reached out to the European Union to impose export authorisation measures, which were there till the Covid pandemic.
In the EU's push for reducing carbon emissions in the metal industry, the scrap is deemed the hero metal as recycling helps save 95 per cent of the energy required to produce virgin aluminium. This not only supports in achieving the carbon emission goal set but also in having increased secondary aluminium production.
Europe's total aluminium scrap exports stood at 345,000 tonnes in 2025 Q1. Moreover, with the US keeping their in-house scrap to themselves, Europe is on the path to becoming the next prominent exporter of aluminium scrap.
However, with the increased export of the aluminium scrap can affect the overall net zero goal by 2050, which could be achieved by increasing the secondary aluminium production than primary, requiring lesser energy.
Compared with previous years of EU aluminium scrap exports to the US, in 2022, the export stood at 3318.71 tonnes, valuing USD 13,058.42. Next year, EU exports increased by 116.66 per cent to 7190.18 tonnes, valued at USD 29,337.71.
Also read: Relief with a catch: Europe sees scrap leakage risk in US tariff exemptions
Before implementing CBAM in 2026, a transition period beginning in 2024 and ending in 2025, requires major companies’ audits about their emissions. Referring to this, in 2024, EU’s scrap consumption hiked by 1.9 per cent, valuing 76.6 million tonnes, representing a positive dynamic. With the increased consumption, the decline in the inventory can create a further tension in secondary aluminium production.
The EU metal producers were concerned about their scrap before Trump imposed the tariff with the view of pushing the US' domestic scrap production. Europe, in 2023, exported a total of 19 million tonnes of ferrous scrap to major countries like Turkey, which held the majority share, followed by India, Egypt, Pakistan and the US.
Export authorisations in Europe have not been previously used concerning such drastic measures, but desperate situations require extraordinary actions that must be implemented within the coming weeks. However, the metal producers cannot wait for the bloc to strike a deal with the Trump administration, especially before Trump's July 9 deadline.
The US has incentivised metal producers to maximise domestic aluminium scrap production, curbing dependency on international markets. With the 50 per cent tariff, industry players have reflected the price gap between the two markets, indicating it as an "arbitrage window", where the price rose to USD 750 per tonne.
Also read: Metlen Energy & Metals warns of risks to Europe's aluminium scrap, urging safeguards
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