At its annual conference, the German Steel Recycling Association (BDSV) has released a statement regarding the general conditions in the steel recycling industry, the energy crisis, and the preservation of free world trade in steel scrap.
The skyrocketing electricity and natural gas prices in Europe pose major challenges for steel recycling and jeopardize the ambitious goals in terms of climate neutrality and circular economy at both national and EU levels. Like many other companies, the BDSV member companies are increasingly running the risk of no longer being able to produce economically.
Meanwhile, with the lack of raw material deliveries from Russia, Ukraine and Belarus due to the war, the global demand for the recycling raw material has increased sharply. Above all, good qualities of scrap are in demand as a substitute for pig iron deliveries from the war-affected regions. However, the exploding energy costs and the worsening of the supply chain problems lead to high uncertainties along the entire value chain. Trading in steel scrap is preparing for a difficult final quarter as high energy costs are expected to continue. The BDSV stated that the principle of the merit order must be changed as quickly as possible so that the electricity price is no longer linked to the gas price. In addition, the association has called on the European Commission to include recycling in the list of economic sectors eligible for EU aid.
Regarding the threat of trade barriers due to the revision of the EU Waste Shipment Regulation, the BDSV has repeatedly pointed out that free world trade in steel scrap is of vital importance to German and European recycling companies. A restriction of trade and the associated foreclosure of end markets for recycling raw materials will have a negative impact on waste collection, recycling, and investments to expand recycling capacity. The BDSV stated that it expressly welcomes stricter export restrictions for problematic waste streams, though it criticizes the fact that imported primary raw materials such as coke and ores are not included in the carbon border adjustment mechanism, while the export of climate-friendly steel scrap is to be restricted. This approach jeopardizes the goals of EU recycling.