Don’t gamble with our industry, say EU recyclers

An action plan to maintain and expand industrial capacity in the EU’s steel and metal sectors has been set out in Brussels – but recyclers fear it gambles with their future and existence.

The European Commission’s new strategy considers energy costs, debarbonisation, production capacity and circularity. It says the Action Plan on Steel and Metals will strengthen the sector’s competitiveness and safeguard the industry’s future. Together, they employ directly and indirectly nearly 2.6 million people within Europe.

Unveiling the plan, Commission president Ursula von der Leyen says: ‘The steel industry has always been a core engine for European prosperity. Next-generation, clean steel should therefore continue to be manufactured in Europe. That means we have to help our steelmakers who are facing strong headwinds on the global market.’

Circularity push

Six key areas are involved:

• Ensure an affordable and secure energy supply for the sector: the Plan promotes the use of power purchase agreements and encourages member states to leverage energy tax flexibility and reduced network tariffs to alleviate electricity price volatility.
• Prevent carbon leakage: within weeks, the Commission will set out how it will address the problem of carbon leakage for Carbon Border Adjustment Mechanism (CBAM) goods exported from the EU to third countries. By the end of the year, it proposes to extend the scope of CBAM to certain steel and aluminium-based downstream products.   
• Expand and protect European industrial capacities: by the end of the year, the Commission will propose a long-term measure to protect the EU’s steel sector once the current safeguard expires in mid-2026.
• Promote Circularity: the Commission is to set targets for recycled steel and aluminium in key sectors and assess whether more products, such as construction materials and electronics, should have recycling or recycled content requirements.
• De-risking decarbonisation: an Industrial Decarbonisation Accelerator Act will introduce resilience and sustainability criteria for European products in public procurement to boost demand for EU-produced low-carbon metals.
• Protect quality industrial jobs: labour policies will support skills development and fair job transitions.

False narrative

In response, the Europe-wide recyclers’ organisation EuRIC has repeated its criticism of the desire to keep scrap in Europe by restricting exports, when there is weak domestic demand and limited processing capacity.‘There is no shortage of scrap in Europe,’ says a new release. ‘80% of recycled steel stays in the EU, and the 20% exported is surplus – not leakage. The claim of ‘scrap leakage’ is a false narrative. The real problem is Europe’s failure to create demand for its own recycled materials and address high energy prices. Restricting exports won’t fix the steel industry – but it will break European recycling.’

‘No one the buy them’

A proposal for export restrictions this year, followed by a strategy to increase demand is the wrong way round for EuRIC. It argues the EU must first stimulate demand for circular materials in metal manufacturing.
‘Any discussions on exports are a distraction, says Julia Ettinger, EuRIC’s Secretary General. ‘You cannot force recyclers to keep surplus recycled materials in Europe if there is no one to buy them.’