According to the European Commission’s Joint Research Centre (JRC), the EU remains one of the world’s largest steel producers despite a 20 percent decline in output between 2018 and 2024. The bloc’s steel industry continues to rely heavily on imports for 75 percent of its iron ore and coking coal, underscoring the urgency to diversify supply and expand circular material use.
The latest Raw Materials Information System (RMIS 2025) briefs—titled “Current Trends and Circularity Opportunities” and “Characterisation & Use of EU Steel Scrap in Relation to Global Trade Dimensions”—outline how high-quality scrap will become a strategic raw material for European steelmakers amid global trade tensions and stricter decarbonization rules.
Circularity and decarbonization: EAF and DRI to reshape EU steelmaking
The JRC projects a rapid shift from the conventional blast furnace–basic oxygen furnace (BF-BOF) route toward electric arc furnace (EAF) and hydrogen-based direct reduced iron (H₂-DRI) technologies. By 2035, EAF-based routes could represent up to two-thirds of EU steel capacity, compared with 41 percent today.
This transformation is essential for cutting emissions—steel accounts for 5-6 percent of EU’s carbon output—and aligns with the Clean Industrial Deal, the Steel and Metals Action Plan, and the upcoming Circular Economy Act (2026).
However, the JRC cautions that EAF competitiveness remains constrained by high EU electricity prices, which are more than double those in the US, and by limited availability of premium-grade scrap suitable for automotive and electrical-steel applications.
Scrap availability and export dynamics: EU leads global trade
Ferrous scrap is increasingly seen as Europe’s “new raw material.” Yet the EU exports about 20 percent of all scrap collected, primarily to Turkey (60%), Egypt (10%) and India (5%).
Between 2014 and 2023, EU scrap exports rose nearly 50 percent (from 12 million mt to 19 million mt), even as domestic steel output fell. In 2024, exports eased to 16.2 million mt, but the EU still accounted for 30 percent of global scrap exports, making it the world’s largest supplier ahead of the US.
JRC data reveal that 87 percent of exported material consists of medium- to low-grade scrap (E40 and E46), often unsuitable for high-spec steel. Improving collection and sorting could unlock 20-40 million mt of Q2-quality scrap annually—enough to support new EAF capacity and reduce dependence on imports of primary iron sources.
Global competition: China and US reshaping the scrap market
The reports warn that global scrap dynamics could tighten further.
- United States: New tariffs on steel and aluminum imports—up to 50 percent—could boost US domestic production and raise scrap demand by 8-27 million mt, potentially reducing export volumes.
- China: Aiming to raise its EAF share from 10 to 15 percent, China could add 45 million mt of annual scrap demand, equivalent to half of the EU’s post-export scrap availability.
If both trends materialize, Europe may face heightened competition for scrap feedstock in the coming decade, stressing the need for quality-based monitoring of trade flows and strategic scrap retention policies.
Steel’s circular future depends on scrap mastery
The two JRC reports send an unmistakable message: Europe’s decarbonized steel future will rise or fall on the quality, not just the quantity, of its scrap.
If the EU successfully implements quality-based regulation, incentivizes advanced recycling, and aligns trade policy with circular-economy objectives, it can secure both competitiveness and climate goals.
Failing that, the region risks exporting its most valuable secondary raw material while importing high-emission primary steel — the very imbalance the Green Deal seeks to end.