EU scrap supply, economic independence critical

The EU’s failure to classify scrap as a Critical Raw Material (CRM) is baffling, given the EU’s scrap surplus will likely soon turn to a deficit amid steelmakers’ EAF transformation. However, the list is subject to revision and could soon see scrap added, concluded a panel at this week’s European Economic Congress in Katowice attended by Kallanish.

Scrap was not made a CRM solely because the EU is a net scrap exporter, but steelmakers are already looking ahead. “It’s absolutely the last chance to understand what is going to happen,” warned chief executive of Polish steelmaker Cognor, Przemyslaw Sztuczkowski. The circa 60% of EU steelmaking that is blast furnace based will, due to decarbonisation, soon need to source scrap feedstock.

When it comes to hydrogen, “our belief in it, as steelmakers, is limited because the technology is futuristic and very expensive,” Sztuczkowski commented. The EU’s 30 million tonne scrap surplus will likely turn into a 30mt deficit, he added. There will be a “mad rush” for steel scrap in Europe and globally, he continued. Scrap should therefore be added to the CRM list at some point. For now, it should be monitored and licensed, while its export from the EU should be levied with a duty.

Ryszard Pawlik, parliamentary advisor to European Parliament Member Jerzy Buzek, pointed out that EU officials fought to include scrap on the CRM list, and this was the case initially. However, it was removed again following consultation with individual EU Member States. Nevertheless, “there is still hope” as the list is periodically reviewed, he added.

As for coking coal, this will likely remain an EU CRM for as long as steel remains a strategic material amid Europe’s need to strengthen its defence industry and decarbonise, said Weglokoks chief executive Tomasz Slezak. Global iron ore supply is plentiful, but coking coal sources are more limited. Europe is unlikely to move quickly away from BFs because decarbonising steel is complex, costly, and needs infrastructure to be built using steel, he added.

The panel also saw discussion on other CRMs. Herbert Wirth from the Faculty of Geoengineering, Mining and Geology at the Wroclaw University of Science and Technology, said significant volumes of cobalt and vanadium are found in Polish copper waste. However, these are not systemically documented and they are not recovered. There needs to be impetus from the state to change this. Sodium is also available in abundance in Poland.

Opening the panel, Jerzy Buzek noted: “If we don’t want to … slow our fair green transformation, or weaken the economic resilience of the EU, wise management to secure critical raw materials, including the diversification of their import and, where possible, domestic production and recycling, are key. If we don’t do this, we will be unable to fulfil the most important expectation of our citizens, but also the business world – to continue to have a competitive, prosperous and secure European economy.”

This is far more important today than resisting environmental measures, as is the case in some EU circles. Russia’s aggression in Ukraine has shown the EU must act to ensure it has a strong defence industry but also that its economy is independent, he added.

Adam Smith Poland