EU Shelves Aluminium Scrap Export Duty After India Raises Concerns

The European Union has abandoned a proposed export duty on aluminium scrap, with sources familiar with the discussions pointing to concerns that the levy could complicate the final signature of a free trade agreement with India.

The draft proposal, which had been scheduled for announcement on September 23, would have imposed a 15% export duty on aluminium scrap for three years. An annex listed 91 countries and territories to be exempted, including India, the largest buyer of EU scrap. Industry had sought a duty of 30%.

According to sources, pressure from New Delhi prompted the dilution of the measure. Indian government officials had asked Brussels for relief from the planned curbs in late June. Commission President Ursula von der Leyen is expected to sign the trade deal with Prime Minister Narendra Modi in December.

The reversal lays bare divisions within the European Commission over protecting industry as U.S. tariffs reshape global trade and China moves up the value chain. Last week, the office of EU industry chief Stéphane Séjourné said he would drop the measure after internal negotiations left the draft covering only half of aluminium scrap.

In a briefing, the Commission said the trade measure was on hold because it had concluded the same goal could be met under the EU's Waste Shipment Regulation. A spokesperson did not comment on pressure from India but said work was ongoing to finalise implementation of the waste regulation.

European smelters have faced mounting pressure from soaring scrap prices and structurally higher energy costs and regulatory burdens than their Asian competitors. EU aluminium scrap exports have risen 51% since 2019, reaching a record 1.26 million metric tons in 2025. Third countries pay up to 26% above EU domestic prices, partly due to subsidies and trade distortions, according to the draft proposal.

Industry figures warned that dropping the duty could undermine confidence. Emilio Braghi, chief operating officer of aluminium producer Novelis Inc., said reversing course at this stage risks undermining confidence in Europe's industrial policy framework. Jostein Roynesdal, head of EU public affairs at Norsk Hydro, said the withdrawal was concerning, noting the company has closed four recyclers in the EU in recent years and hopes to avoid further closures.

Under the Waste Shipment Regulation, expected to be finalised in November, the bloc will ban exports of non-hazardous waste to non-OECD countries from May 2027. Countries can be granted exemptions upon request, and a draft of the secondary legislation showed 32 non-OECD countries had applied. Major buyers India, Thailand and Malaysia failed to meet environmental rules for an exemption on metal waste, the Commission said in the draft, meaning they will be unable to buy metal scrap directly from the EU.

Industry sources say it is unclear how effective the environmental rules will be in preventing circumvention. Paul Voss, director general of industry association European Aluminium, said the industry will work closely with the Commission but is convinced it will need to return to the trade measure soon.

India's commerce ministry did not immediately respond to a request for comment.