Recent proposals by UK Steel to restrict the export of scrap metal have raised concerns within the recycling industry, with the British Metals Recycling Association (BMRA) cautioning that such measures could lead to the downfall of scrap businesses.
The UK government’s commitment to sustainability, exemplified by a £500 million investment in Tata Steel’s adoption of electric arc furnaces (EAFs) at Port Talbot, signifies a national shift towards more environmentally friendly steel-making processes. While EAFs contribute to lower carbon emissions, they exclusively rely on scrap metal as a feedstock.
UK Steel’s call for scrap steel to “stay in the UK” was prompted by this shift in the industry. However, the BMRA issues a warning, highlighting that restricting exports might have a “catastrophic negative impact” on material prices and jeopardise the viability of many metal recyclers.
Predictions by UK Steel suggest that, by 2050, even with all proposed EAFs in operation, the maximum demand for scrap steel in the UK will be around seven million tonnes. This leaves a potential surplus of three million tonnes without a destination if exports are limited.
The BMRA emphasizes that metal recyclers currently export due to insufficient domestic market demand. As domestic demand grows, they argue, recyclers will readily meet the needs, given the right economic conditions.
Calling upon the government, the BMRA advocates for policies that encourage investment in cutting-edge technology and skills to enhance the quality of scrap recycling. They stress the importance of creating a supportive environment for the use of UK-produced steel, incorporating high levels of recycled content through green procurement policies and tax incentives. Additionally, the BMRA proposes underwriting contracts between steel-makers and recyclers to address issues related to extended payment terms.
Amid these discussions, it’s crucial to recognize that the UK currently exports 80% of its annual 10 million tonnes of scrap, with Turkey being the primary export market. The industry is at a crossroads, and the decisions made in the coming months will undoubtedly shape the future landscape of metal recycling in the UK. Stay tuned for updates as RecMat Ltd continues to navigate these evolving dynamics in the recycling sector.