Scrap isn’t the problem – policy is

Let me be direct: the global recycling industry is being disrupted by people trying to solve the wrong problem.

Across Europe and beyond, there is growing momentum behind export restrictions on scrap, tariffs, quotas and tighter classifications. The stated logic is appealing enough. Keep valuable materials domestic. Strengthen industry. Support decarbonisation. It sounds strategic. It sounds responsible. In practice, it risks dismantling the very system it claims to protect.

Recycled metals have moved across borders for decades with remarkable efficiency. Not because of policy but because of economics. Scrap flows to where capacity exists, where energy is affordable, where demand is real. That system has quietly enabled high recycling rates across the globe.

However, in many regions, there simply isn’t enough domestic infrastructure to process everything that gets collected. So, when policymakers talk about ‘keeping scrap at home’, the question they need to answer is: home to what, exactly?

FUNDAMENTAL TRUTHS

Policy cannot override fundamentals. If you restrict scrap exports without having competitive energy, sufficient processing capacity, and stable investment conditions, you don’t create resilience. You create pressure. Material gets trapped in regions without the means to process it.

Local prices weaken. Recyclers lose margin. Investment slows. Meanwhile, global buyers adapt. Supply chains shift, new routes emerge, and the material moves anyway. Just less efficiently, and often at greater environmental cost. This is the uncomfortable truth about scrap restrictions: the material doesn’t disappear. It reroutes.

And yet – somehow – the conversation in policy circles keeps landing in the wrong place. If the genuine goal is to build domestic recycling capacity, then we need to be honest about what’s holding it back. In many parts of the world, energy costs are uncompetitive.

Regulatory systems are slow and fragmented. Long-term policy certainty is essentially non-existent. These are the real barriers. But rather than fixing those, the instinct is to control material flows, as if restricting exports will conjure the infrastructure that should have been invested in years ago.

You cannot build industrial strength on weak foundations.

FRAGMENTATION FOLLY

There’s a more fundamental issue underneath all of this, one that rarely gets named directly. Why are we still treating high-quality secondary metals as waste? If we are serious about building a modern circular economy, we need to modernise how we classify the materials within it, because many of them were never truly waste to begin with.

Recycling has always been a global industry. It balances supply and demand across regions, connects markets, and keeps materials in productive use. Trying to force it into artificial boundaries, without addressing the underlying realities, won’t strengthen it.

It will fragment it. And fragmentation means higher costs, lower efficiency, and reduced recycling performance across the board. At a moment when the world needs more circularity, not less, that is a risk we cannot afford to take lightly.

This isn’t an argument against building domestic capacity. It’s an argument for doing it properly, in the right order, for the right reasons. If we focus on restricting scrap before fixing the conditions around it, we risk destabilising the very system we depend on.

Once you’ve broken that, once you’ve fragmented the trade flows, weakened the economics and driven investment elsewhere, rebuilding it will be far harder than protecting it ever was.