The BMRA cautions against UK Steel's proposal to restrict scrap exports, fearing adverse impacts on recyclers. With the move toward sustainability in steelmaking using electric arc furnaces, limitations on exports may inflate material prices and challenge recyclers' sustainability.
The British Metals Recycling Association (BMRA) has sounded a red alert against potential repercussions of constraints proposed by UK Steel on scrap metal exports. The proposed limitations, if enforced, could lead to severe adversities for scrap businesses, raising concerns about their sustenance in the industry.
The UK's recent drive toward sustainability in steel production, evidenced by the allocation of £500 million to Tata Steel for the modernization of steel-making in Port Talbot through electric arc furnaces (EAFs), is a significant stride. However, EAFs rely solely on scrap metal as feedstock, heralding a shift away from high carbon emissions associated with traditional methods.
In response, trade body UK Steel advocates for keeping scrap steel within the UK, discouraging its export. However, the BMRA warns of a looming catastrophe, citing potential adverse effects on material prices and the survival of numerous metal recyclers if export restrictions are imposed.
Projections by UK Steel indicate that by 2050, even with EAFs operational, the maximum demand for scrap steel might reach seven million metric tons, leaving a surplus of approximately three million tons if exports are curtailed.
The BMRA underscores that recyclers resort to exports due to limited domestic market demands. It emphasizes that with a burgeoning domestic demand, recyclers could effectively meet the needs, given favorable economic conditions.
In a plea to the Government, the BMRA advocates for incentivizing technological advancements and skill development within the recycling sector to ensure quality scrap recycling. It urges policy support, suggesting measures like green procurement policies, tax incentives, and facilitating contracts between steel-makers and recyclers to alleviate challenges posed by extended payment terms.
According to UK Steel, the UK annually generates 10 million tons of scrap, with a staggering 80% currently exported. Turkey stands as the primary export market for this scrap metal, highlighting the potential impact of any export curtailment.
The debate surrounding the proposed limitations on scrap steel exports reveals a critical juncture in the UK's steel industry transformation towards sustainability. While the push toward electric arc furnaces signifies progress, the BMRA's cautionary stance emphasizes the delicate balance needed to ensure the sector's economic viability and environmental consciousness.