The European Commission is preparing to formally announce targeted aluminium scrap export restrictions during the second quarter of 2026, with a proposed 30 percent export duty on all aluminium scrap classified under HS code 7602, applicable to all third-country destinations except the European Economic Area, Switzerland, and the United Kingdom..
Expected EU Impact
The 30 percent export tariff will immediately create a sharp valuation discontinuity between domestically consumed material and export-bound scrap. price signals incentivize material flows away from Europe.
- European secondary smelters operating with existing capacity will face increased domestic scrap availability at reduced prices, theoretically improving margins and enabling higher domestic aluminium production volumes.
- However, this benefit contains a critical vulnerability: scrap collection rates might decline in response to lower scrap prices, as the economic viability of scrap collection depends fundamentally on price spreads between secondary material values and collection costs including labor, transportation, and facility overhead. Used beverage containers (UBC) represent particularly vulnerable material.
- The extraordinary success of EU Deposit Return Schemes achieving 76-99 percent aluminium can recycling rates across European member states definitively establishes that scrap availability is fundamentally a collection economics problem rather than an absolute supply shortage, meaning the tariff’s actual effectiveness depends entirely on maintaining sufficient price spreads to sustain collection profitability for dispersed postconsumer material.
- The tariff will interact complexly with the Carbon Border Adjustment Mechanism (CBAM), which entered into force on January 1, 2026, creating a multidimensional policy framework simultaneously addressing trade imbalances, , and circular economy objectives. The export tariff on scrap creates a complementary policy mechanism that preserves domestic access to recycled aluminium—which generates significantly lower carbon intensity.
Ex-EU Impact
A 30 percent EU export tariff will immediately reshape global aluminium flows and force substantial restructuring of international trade patterns developed over two decades. Market conditions are already tightening as the industry awaits official Commission announcement specifications, creating artificial supply constraints that underscore the tariff’s prospective impact.
Asia
Asian aluminium producers in India, China, Thailand, and Pakistan will face substantially supply chain adjustments as these countries pursue aggressive domestic scrap collection initiatives or source from alternative suppliers. India’s government has positioned aluminium production at the core of its economic strategy through the 2025 Aluminium Vision Plan, with capacity expansion targets reaching 12 million tonnes by 2030. The redirection of European aluminium scrap flows away from Asia would likely trigger compensatory supply chain adjustments as Chinese, Indian, and Southeast Asian producers develop stronger economic ties to other alternative suppliers.
North America
North American aluminium markets will experience particularly pronounced impacts from the EU tariff. The 50 percent US Section 232 tariff on primary aluminium combined with 15 percent reciprocal tariff on aluminium scrap has already created acute scrap availability constraints and elevated Midwest aluminium premiums. The reduction of European scrap supplies to the US market—which received dramatically elevated export volumes during 2025 due to the tariff arbitrage window—will intensify these supply constraints while simultaneously creating opportunities for North American secondary smelter capacity expansions.
GCC Regional Impact
GCC aluminium producers’ sourcing strategies and competitive positioning require fundamental reorientation, simultaneously constraining access to low-cost European feedstock while creating opportunities for domestic recycling expansion and looking for new regions for scrap supply.
GCC producers operating recycling facilities with access to scrap can convert it to low-carbon products that qualify for CBAM advantage relative to primary imports, creating structural incentives for regional investment in recycling capacity.
Conclusion
The EU’s potential aluminium scrap export tariff reveals fundamental tensions between competing policy objectives that remain unresolved as formal announcements approach in Spring 2026.
International buyers including US, Indian, Chinese, and GCC producers will pursue aggressive supply chain diversification while market participants frontload exports ahead of formal implementation—following 2025 US tariff patterns—potentially reducing the tariff’s effective impact while simultaneously depleting available inventory just as domestic collection incentives begin contracting. The actual economic outcome will crystallize only during the post-implementation adjustment period in late 2026 and 2027.
