EU steelmakers, facing steep decline, want Brussels to intervene to give them more access to scrap metal. Recyclers aren’t happy.
WILLEBROEK, BELGIUM — It’s called “urban mining,” I’m told, as we walk among piles of discarded washing machines, construction debris and vehicle carcasses in one of Belgium’s major scrap yards a few kilometers south of Antwerp.
Behind us, a giant metal shredder is at a standstill. Trucks are going back and forth, organizing hundreds of metric tons of aluminum and steel fragments into neat piles beside the waste treatment facility, ready to be melted and used again. Inside, a conveyer belt takes the scrap metal into tanks filled with water and chemicals to separate the valuable metal from unwanted materials like rocks, glass or plastic.
It’s not the most glamorous of sites, but it’s a strategic one.
Each year, the Belgian Scrap Terminal processes as much as 1.5 million metric tons of scrap metal across eight facilities in Belgium, France and Luxembourg. That’s enough metal to build more than a million family cars.
Inside these piles of junk is what Europe’s struggling manufacturers hope will be a lifeline against sky-high energy costs and increasingly unreliable access to raw materials: a cheap source of recycled metal that could make their products cheaper, greener and more competitive.
The problem, they argue, is that the majority of this recycled metal ends up in the hands of their rivals outside Europe.
On the global market, high demand for scrap — which is cheaper and uses less power to melt into new metal — has made prices explode.
“We are shooting ourselves in the foot,” says Aurelio Braconi, director for stainless steel and raw materials at Eurofer, arguing Europe was putting itself at a disadvantage by selling materials to non-EU countries that transform it and “re-export to us the finished products.”
The Trump effect
Like many other recycling firms in Europe, the Belgian Scrap Terminal sells up to 90 percent of its output to companies outside the EU. And business is booming.
Europe’s heavy industry, meanwhile, is hanging by a thread. Already clobbered by high energy costs, the metallurgical sector is now bracing for a new assault: a flood of cheap Asian metal coming into Europe after U.S. President Donald Trump increased tariffs on global imports of steel and aluminum.
The move has reignited a trade war between the two jurisdictions that led the EU to retaliate with its trade “sledgehammer” to protect its domestic economy.
Then there’s the pressure to go green. Few jurisdictions have climate rules as stringent as the EU, and compliance is costly and complicated for polluting industries like steel. Reusing old metal is one of the easiest ways for heavy industries to reduce their environmental footprint.
But global demand for the secondary stuff is booming, and so are market prices. A ton of steel scrap costs about €300 on the global market these days, and can go as high as €1,800 for aluminum. Buyers from overseas, where energy is cheaper and green rules can be less onerous, can often afford to pay more than European companies.
Now manufacturers are pushing hard for Brussels to intervene and ensure more metal scrap stays in Europe, hoping it will increase supply.
“Scrap leakage creates a missed opportunity for Europe’s decarbonization, strategic autonomy, and competitiveness ambitions,” the directors of Eurofer and European Aluminium, Europe’s biggest steel and aluminum lobbies, told the European Commission in a letter last December.
The Belgian Scrap Terminal sees it differently. The family-run business prides itself on producing recycled metal that fulfills one of the EU’s core environmental strategies: turning waste into a high-quality resource.
That quality comes at a price that industry in Europe is not willing to pay, they argue.
If most of what BST recycles gets exported, “it’s not because I don’t want to sell in Europe, it’s because it’s [how I get ] the best price,” a senior operations manager at the scrap yard said.
While heavy industry lobbies Brussels to ban the export of scrap metal, recyclers are pushing back, desperate to save their business models.
A broken industrial backbone
At the heart of this dispute is a painful reality that Brussels will eventually need to face: Its heavy industries are in fast decline, and not all of them can be saved.
The EU is the third-largest producer of steel after China and India, making more than 126 million metric tons of the metal in 2023, according to the World Steel Association. The steel industry generates about €130 billion in value for the EU economy and, crucially, employs over 2 million people, according to Eurofer.
But sky-high energy costs since Russia’s full-scale invasion of Ukraine in February 2022 have pushed up the price of European products, making them less desirable than cheaper alternatives from China and the U.S., or from emerging players like India, Turkey and Vietnam.
The cost of making a metric ton of steel in Europe is 11 percent higher than in the U.S. for instance,while making a metric ton of aluminum costs 18 percent more than in China, according to the European Roundtable for Industry.
Europe’s sluggish economic growth has also depressed demand for steel-made products.
This confluence of harsh realities caused steel production in Europe to fall nearly 20 percent between 2014 and 2023.
To counter these worrying trends, the European Commission last month unveiled a grand strategy designed to revitalize heavy industry and get it to decarbonize over the coming years. Known as the Clean Industrial Deal, the strategy puts a heavy focus on recycling and reuse. Brussels is also in the process of negotiating with the steel industry and recyclers to come up with an action plan that can save the sector.
It has also floated the possibility of the EU’s limiting the export of certain waste metals — such as copper, lithium and nickel — that are essential to the clean energy transition.
But industrial players argue that scrap exports of other materials like steel and aluminum should also be limited, given how other regions approach materials trading. China heavily restricts exports of critical materials, from the key minerals used in clean technologies to scrap metal. The same is true of India and Vietnam.
Europe already has some extra administrative requirements for the export of non-hazardous waste, including metal, to certain countries, to make exports more difficult without restricting them. Heavy industry says this is not enough.
“Countries all around the world … keep their own scrap and are importing [it] from Europe” says Eurofer’s Braconi. To make matters worse, he adds, “we are importing steel from them.”
Exaggerated fears
In the pristine offices of European Aluminum, across Brussels’s Parc du Cinquantenaire, the walls have been decorated with repurposed multicolor drink cans.
Sitting across me at one of the high tables, George Karkampasis, circular economy & recycling manager at European Aluminium, tells me that scrap metal exports are a “double missed opportunity” for Europe, which he describes as “a continent starved both for materials and for energy.”
But recyclers argue this is an exaggeration. In 2023 the EU exported about 21 million metric tons of scrap metal to other countries (mostly Turkey), which was only about 20 percent of the total scrap metal the bloc generates in a year. The majority is already used in Europe.
“The call of the aluminum and steel industry is unfair,” said Veronica Plazinic, technical adviser on metals for the EU recycling industry group EuRIC, to which the Belgian Scrap Terminal belongs.
The real culprits in the sector’s downfall, EuRIC argues, are the reduced production of cars in Europe and the fact that fewer infrastructure products on the continent require metal. Banning exports won’t reverse that industrial decline, while it would virtually guarantee that recyclers are worse off.
To ensure a high-quality product, recyclers have to invest and update the technologies they use to treat the waste metal. And that means selling their product for a decent price.
“What we have not seen is a willingness from the buyers to match [the prices paid overseas],” said Plazinic, noting that European recyclers are also affected by high energy prices.
The bigger picture
Economic experts are also skeptical about restricting scrap metal exports.
Heather Grabbe, senior fellow at the Bruegel think tank, argues that “banning [scrap] exports is not the way to increase demand [for steel products].” Nor will it fix the main issue the sector faces, which is high energy prices, she adds.
With all sectors facing a difficult road to decarbonize and remain competitive, Brussels must make tough choices on where to intervene. Steel and aluminum producers point to their core role in construction and industry and to the huge number of EU citizens whose livelihoods depend upon them.
Recyclers, meanwhile, highlight their role in greening the economy. In a low-carbon world, they argue, they are a strategic sector, and Brussels would be foolish to do anything that would slow innovation.
Grabbe argues that Europe should be asking itself “whether it makes sense to continue producing steel in Europe, and whether it’s really going to be a competitive industry [in the] long term.”
That won’t be easy for Brussels, however, where protecting the region’s historical job- and growth-creating industry has become highly politicized.
So far Brussels has been receptive to overtures from the steel sector. European Commission Executive Vice President for Industry Stéphane Séjourné — who co-leads the bloc’s industrial strategy — thinks Brussels should create incentives to keep scrap metal within EU borders and to “limit the export of of raw materials, especially because it’s processed abroad and comes back to the EU — which from a carbon footprint perspective is not very smart,” he told POLITICO.
But others argue that from a climate perspective the EU should see the benefits of contributing to the decarbonization of manufacturing globally — not just its own.
“The emissions come regardless of where you emit,” says Sangeeth Raja Selvaraju, sustainable finance fellow for emerging markets at the London School of Economics’ Grantham Research Institute on Climate Change and the Environment.
Access to scrap for recycled metal production is essential to emerging markets, adds Selvaraju, because it’s the only affordable way for them to go green.
“A ban on export of scrap [means] you’ve chosen the cheap route to decarbonize” and left the expensive alternatives “to the countries that are least capable of [it],” he says.
Whether this charitable globalist message will chime with inward-looking EU leaders, preoccupied with competitiveness and security in an increasingly hostile world, is uncertain.
