MRAI 2024: Nonmarket obstacles a source of concern

Delegates at the 2024 Material Recycling Association of India (MRAI) International Material Recycling Conference heard plenty of encouraging words from the event’s stage about the current and future demand for recycled raw materials in India and beyond.

Mixed in with the market-based optimism in Kolkata, India, in late January, however, was talk of current and future trade policies with the potential to provide discouraging barriers to scrap metal flow across national borders.

The term “scrap nationalism” was used by several presenters to refer to government actions designed to keep scrap metals within jurisdictions using a variety of techniques.

Longtime MRAI officer Dhawal Shah of Mumbai, India-based Metco Marketing cited outright export bans as one of the most comprehensive techniques, with bans on some grades having been erected in more than one nation in the Middle East and by South Africa.

In Brussels, European Union policymakers have devised a system claiming to offer environmental, health and safety benefits by prohibiting its recyclers in the EU from shipping scrap materials unless the buyer can demonstrate compliance with EU environmental and safety regulations.

Shah said India receives as much as 35 percent of its scrap materials from the EU and raised the idea that protectionism rather than health and safety may have played a leading role in the new policy.

Shah said as circular economy success stories proliferate, the world “gradually realizes these scrap [grades] are so valuable, [so] they are asking, ‘Why are we letting it go to India?’”

Another threat to India’s metals industry emanating from Brussels could be the carbon border adjustment mechanism (CBAM) system being phased in by EU nations.

Arnaud Brunet, director general of the Brussels-based Bureau of International Recycling (BIR), said the shipment of scrap itself is not currently regulated by the CBAM policy. Rather, by imposing a border tax on metals made at facilities with higher carbon footprints, CBAM could stem exports and overall production of metal in nations with developing economies such as India.

Brunet listed one of the objectives of CBAM as to “incentivize foreign producers to reduce emissions.” For recycled-content metals producers in India that can demonstrate a small carbon footprint, CBAM might not be a looming threat.

Policymakers in Washington have discussed imposing a CBAM-type system for the United States, but, in the meantime, the threat to India’s scrap flows from that nation could be more market-based.

Shah said about 20 percent of India’s scrap comes from the U.S. and introduced Brian Henesey of the U.S. by asking about new nonferrous production capacity coming online there. Henesey, of Colorado-based Rocky Mountain Recycling, currently serves as board chair at the Washington-based Institute of Scrap Recycling Industries (ISRI).

A slide Henesey shared showed recent or upcoming recycled-content red metals capacity being installed by Aurubis, Wieland North America and Prime Materials Recovery (Ames Copper). In the aluminum sector, investments by Steel Dynamics Inc. (Aluminum Dynamics), Hydro, MetalX, Novelis Inc. and Spectro Alloys were listed.

Despite the investments, Henesey sounded an optimistic tone that the U.S. recycling sector would remain open for business to buyers from around the world, including to India, which currently is the No. 1 buyer of aluminum exported scrap shipped from the U.S.

He said ISRI will continue to promote the importance of being able to export our products, adding the association was devoted to the concept of “free and fair trade.”

The 2024 MRAI International Material Recycling Conference was Jan. 23-25 at the Biswa Bangla Mela Prangan convention center in Kolkata.