Call for Evidence EU Aluminiumsektor

The Chemnitz Chamber of Industry and Commerce (IHK) represents the economic interests of more than 80,000 companies in the Chemnitz chamber district and serves as the central voice of the region. Within the region’s economic structure, aluminium plays a significant role: the production, processing, use and recycling of aluminium are carried out by numerous companies, which are predominantly organised in a small-scale, medium-sized enterprise structure. This diversity along the entire value chain is an important component of the regional industry and makes a substantial contribution to the economic performance of the location. The Chamber expressly welcomes the fact that the European Commission has recognised the need to examine trade policy measures in order to ensure the availability of aluminium scrap within the European internal market.

From the perspective of the regional economy, there is a significant need for action, as global material flows of aluminium scrap are increasingly developing to the detriment of Europe, driven by very different market conditions and strategic forces. Companies from industry, trade and processing sectors are observing a persistent outflow of aluminium scrap from the European Union to China, India, Malaysia, Pakistan, and also to the United States. These material flows are not exclusively price-driven, but in many cases reflect targeted, strategic procurement and consolidation strategies.

China in particular, and increasingly also India, are deliberately purchasing large volumes of aluminium scrap from the European market in order to meet their growing domestic demand for aluminium. This is not a matter of short-term trading activities, but rather of the strategic establishment of largely closed process chains and material flows in which secondary aluminium is systematically integrated into national industry. Similar developments can also be observed in parts of Southeast Asia. These actors operate under entirely different energy, industrial and trade policy frameworks than European companies and are therefore able to attract substantial volumes from the European market. As a result, European recyclers, smelters and downstream processing companies face a structural competitive disadvantage that cannot be compensated for by market mechanisms alone.

From a European perspective, a particular competitive challenge arises in relation to the United States. US market participants are purchasing significant quantities of aluminium scrap in Europe and exporting it to the United States for further processing. There, they benefit from extremely low energy prices and thus significantly lower production costs. At the same time, the US market for aluminium components and aluminium products is largely shielded from international competition by high tariffs. However, these tariffs do not apply to aluminium scrap, but to processed aluminium products. As a consequence, aluminium is sourced as scrap in Europe, processed at low cost in the United States, and subsequently sold within a protected domestic market. This leads to a systematic relocation of value creation and competitiveness to the detriment of European industry.

Against the backdrop of steadily increasing global demand for aluminium, this problem is set to intensify further. Various industrial stakeholders, traders and processors consistently report that demand for aluminium will rise significantly in the coming years, particularly in the automotive industry, electromobility, mechanical engineering and in the context of the energy transition. Europe and Germany will also experience growing demand for aluminium.

At the same time, the European Union currently exports around 1.2 million tonnes of aluminium per year, both primary and secondary, while importing only approximately 0.75 million tonnes. This results in a persistent net loss of aluminium substance for Europe. In addition, a substantial share of the energy embodied in this material leaves the European economic area along with the aluminium.

These developments undermine European efforts to establish closed material loops and a functioning circular economy, as valuable secondary raw materials are withdrawn from the European recycling and recovery system. The outflow of aluminium scrap therefore not only weakens Europe’s industrial base, but also has negative effects on environmental and climate protection objectives, as the high levels of energy embodied in the material are reused outside the EU, preventing resource- and energy-efficient utilisation within Europe. Taken as a whole, this adversely affects security of supply, industrial resilience and Europe’s overall competitiveness.

At the same time, it should be noted that some market participants, both from the trading and processing sectors, currently assess the market as fundamentally liquid and continue to regard the availability of aluminium as ensured, albeit at significantly changed and higher price levels. This illustrates that the issue is less a short-term supply bottleneck and rather a structural and strategic challenge that requires a forward-looking industrial policy response.

From the perspective of companies involved in aluminium scrap processing in particular, it is therefore of central importance to maintain and strategically expand Europe’s capacity to process secondary aluminium. Only if Europe is able to process sufficient volumes of aluminium scrap domestically and integrate them into its own industrial value chains can a resilient, climate-friendly and competitive supply for industry be ensured. Against this background, industry representatives propose trade policy measures, in particular export duties on aluminium scrap. According to market participants, such duties would need to reach a level of around 30 per cent of the value of the goods in order to have an effective steering effect. Alternatively or additionally, export quotas could be introduced, with significantly higher and tangible export duties applying once such quotas are exceeded.

However, such measures would need to be designed in a targeted and proportionate manner and be accompanied by clear evaluation and review mechanisms in order to avoid unintended side effects while achieving the intended strengthening of European aluminium value creation. Overall, the Chemnitz Chamber of Industry and Commerce (IHK Chemnitz) considers the European Commission’s initiative to be an important and necessary step to address market-distorting, partly strategically motivated practices by international actors and to safeguard Europe’s industrial base in the aluminium sector in the long term. It must, however, be ensured that these measures do not come at the expense of downstream industries.