German associations decry ‘scrap patriotism’

Three German recycling organizations have co-authored a letter to warn against what they call “scrap patriotism” (also sometimes referred to as scrap nationalism) proposals being considered in the European Union, saying such export restrictions jeopardize climate targets and investments.

The Federal Association of German Steel Recycling and Disposal Companies (BDSV), the Federal Association of Secondary Raw Materials and Disposal (BVSE) and the Association of German Metal Traders and Recyclers (VDM) sent the letter to Teresa Ribera, executive vice president of the European Commission and the commissioner for competition.

The same measures have been criticized by the Brussels-based Bureau of International Recycling (BIR) in a statement issued in early December.

In the letter, the associations criticize proposed export restrictions on recycled steel and other types of metals being discussed in Brussels, calling such moves a massive intervention in functioning recycling markets that comes with considerable risks for climate protection, the circular economy and investments.

The criticism is focused on measures including a new Waste Shipment Regulation, the Critical Raw Materials Act and the European Steel and Metals Action Plan. From the point of view of the associations, the initiatives amount to politically limiting exports of scrap to third countries or making them de facto impossible.

“Here it is pretended that structural and cost problems of the primary steel industry can be solved by restricting the sales markets of the recycling industry, although there is no shortage of scrap at all; it’s just an attempt to push down the market price,” BDSV Managing Director Guido Lipinski says.

“Anyone who destroys functioning scrap markets not only endangers thousands of medium-sized companies but also accepts the risk of destroying the functioning circular economy. That would do much more harm than good to the European steel industry.”

The trade groups say the German and the European steel and metal recycling industries are key sectors supporting the decarbonization of manufacturing, estimating that in the EU nearly 60 percent of steel produced is made with recycled metal.

In Germany alone, the scrap recycling industry comprises several thousand companies with tens of thousands of jobs, according to the groups.

Recycling companies have been practicing a true circular economy for decades, BVSE Managing Director Eric Rehbock says, adding they should not have to pay the bill for a "short-sighted industrial policy.”

“Instead of expanding recycling capacities, Brussels is sending the signal: investments in modern processing and sorting technology are a risk because markets can be turned off politically at any time," Rehbock continues. "That is the opposite of transformation security.”

The associations say that rather than export restrictions, reliable and investment-friendly framework conditions are needed to enable additional recycling collection and processing capacity.

“Protectionism helps neither the climate nor Europe as a business location,” VDM Managing Director Ralf Schmitz says. “Our companies compete globally for scrap and sales markets. Those who seal off Europe weaken the international competitiveness of the recycling industry and make European industry more dependent in the long term instead of more independent.”

A report produced by the groups has been designed to analyze the affected markets and identify the economic and legal risks of possible export restrictions.

Those risks include distortions of competition to the detriment of European recycling companies, a weakening of private investment in additional capacities and threats to the long-term supply of high-quality secondary raw materials to the European steel and metal industry, according to the groups.

The associations are asking the European Commission to take greater account of the interests of the recycling industry in their decision-making process and to refrain from de facto export bans or other restrictions.

Instead, BDSV, BVSE and VDM say a coherent policy is needed that considers competition, climate protection and the circular economy together and that understands the recycling economy as part of the solution, not as part of the problem.