Strategic Win for New Delhi: EU Drops Aluminium Scrap Duty Plan Amid Trade Agreement Push
In a significant development for India’s manufacturing sector, the European Union has abandoned plans to impose a controversial export duty on aluminium scrap. The decision comes as Brussels works to finalize a landmark free trade agreement with New Delhi, with both sides keen to remove potential bottlenecks that could complicate negotiations.
The European Commission had initially drafted a proposal for a 15% duty on aluminium scrap exports, intended to remain in effect for three years. The move was designed to keep more raw material within the European market, where industry representatives had even lobbied for a steeper 30% tariff. Given that India is a premier destination for European scrap—importing approximately one-third of the EU’s total outbound shipments—the proposed duty threatened to disrupt supply chains for Indian producers who rely on these high-quality materials.
The Diplomatic Balancing Act
Pressure from Indian officials, who formally requested a reconsideration of the restrictive measures in late June, played a pivotal role in the EU’s pivot. With European Commission President Ursula von der Leyen scheduled to meet Prime Minister Narendra Modi in December to sign a wide-ranging trade deal, Brussels appears unwilling to jeopardize the diplomatic progress made in recent months.
While the specific duty proposal has been withdrawn, the European Commission is shifting its strategy. Rather than using direct trade tariffs, the EU intends to lean on the existing “Waste Shipment Regulation” to control the flow of materials. Under these stringent environmental guidelines, the EU will implement a ban starting in May 2027 on the export of non-hazardous waste to countries outside the Organisation for Economic Co-operation and Development (OECD).
Future Hurdles in Waste Trade
The regulatory shift presents a new set of challenges for India. Although non-OECD nations can apply for exemptions to continue receiving metal waste, the European Commission’s preliminary draft indicates that India, along with Thailand and Malaysia, may not currently meet the rigorous environmental benchmarks required for such permits. If these nations fail to align their practices with the EU’s standards, their ability to directly source aluminium scrap from the European bloc could be severely curtailed in the near future.
The complexity of the situation is compounded by the surging demand for recycled metals. EU aluminium scrap exports have witnessed a 51% increase since 2019, hitting a record high of 1.26 million tonnes in 2025. Data indicates that global buyers are currently willing to pay up to 26% more for European scrap than domestic EU consumers, highlighting the fierce competition for resources.
Industry insiders remain skeptical about whether this shift toward environmental regulation will be as effective as the proposed duties in retaining materials within Europe. However, for now, the withdrawal of the tariff serves as a diplomatic olive branch. As New Delhi and Brussels move toward their December summit, the focus remains on ensuring that environmental policy does not become an unintended barrier to a robust, long-term economic partnership. For India’s secondary aluminium industry, the reprieve provides critical breathing room while they assess the implications of the EU’s evolving waste export criteria.
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