EuRIC urges Turkey to appeal EU WSR to WTO

Turkey and other countries with large steelmaking capacity should consider appealing Europe's revised waste shipment regulation (WSR) to the World Trade Organisation (WTO) if they consider the new legislation will create an unlevel playing field with regards to steel scrap trade, a European trade association said today.

"An appeal to the WTO on this subject is certainly needed," Olivier Francois, president of the European Recycling Industries' Confederation (EuRIC) said today at the IREPAS steel industry event in Istanbul.

The European Commission initially recommended to the European Parliament last year that the EU should consider banning scrap metal exports to non-OECD countries that fail to "notify the EU of their willingness to receive EU waste exports and demonstrate their ability to treat this waste in an environmentally sustainable manner".

But a recent call by the European steel industry association Eurofer to extend the controls to OECD countries and a new draft proposal of the legislation submitted to the parliament earlier this month have sparked growing concerns in the European and seaborne ferrous and non-ferrous scrap industries.

Francois told IREPAS delegates that the revised WSR, for which a draft proposal has been sent to parliament and a final vote is expected before November, is a major breach in free trade as the EU is the largest scrap exporter in the world. Francois also said shutting down this flow of material would create significant disruption to trade, with huge local consequences on the price of steel, but argued that the commission has failed to address this in its impact assessment.

Scrap prices in Europe may fall substantially if a tight export restriction is imposed, as the bloc typically exports close to 20pc of the steel scrap it generates. And any export ban that removes European scrap from global trade will likely lift seaborne scrap prices, meaning that European mills will likely enjoy cheaper scrap relative to steelmakers that traditionally buy large amounts of scrap from the seaborne market such as Turkey. Scrap supply from the EU accounted for approximately 52pc of Turkish imports in 2021.

Francois added that global economic and political situations have substantially changed since the revision was initiated in 2019. The war in Ukraine has put the EU in a position that is strongly dependent on energy supply from other occidental countries. He questioned whether a tight scrap export ban from Europe would send an unfriendly signal to OECD countries of this kind.

Many IREPAS delegates agreed that the new WSR will disrupt scrap flow in Europe and trade in the seaborne market. And some said they will seek further information on this matter and urge their respective industry organisations or governments to voice their concerns if needed.

Alessandro Sciamarelli, Eurofer's director of economic studies and market analysis, said today at the same event that the revised WSR is aimed to create a level playing field for European steelmakers, as it is unfair for European mills that have invested large sums of money to ensure that they adhere to one of the world's tightest environmental standards and have to compete for scrap with mills that have invested less or faced looser environmental regulations.

By Chi Hin Ling