EU drops aluminium scrap export duty plan amid India trade deal concerns

Brussels, Belgium. The European Union has abandoned a proposal to impose an export duty on aluminium scrap after concerns that the measure could complicate the final signing of a free trade deal with India, sources familiar with the discussions said.

Instead, the EU will rely on environmental rules to curb scrap exports, abandoning a levy intended to protect Europe’s smelting industry and support sustainability goals.

Proposal withdrawn

The reversal follows internal divisions within the European Commission over industrial protection as US tariffs reshape global trade and China moves up the value chain.

The duty had been due to be announced on September 23. Last week, the office of EU industry chief Stéphane Séjourné said he would drop the measure after internal negotiations resulted in a draft covering only half of aluminium scrap.

A draft of the abandoned proposal seen by Reuters showed that the Commission had prepared a 15% export duty on aluminium scrap for three years. The industry had sought a 30% duty.

India exemption

An annex to the draft listed 91 countries and territories that would have been exempted from the duty, including India, the largest buyer of EU aluminium scrap.

India accounts for about one-third of EU scrap exports. Indian government officials told Reuters in late June that New Delhi had asked Brussels for relief from the planned restrictions.

European Commission President Ursula von der Leyen is expected to sign the trade agreement with Indian Prime Minister Narendra Modi in December. Sources said Indian pressure contributed to the dilution of the proposed measure.

“The Commission president’s cabinet and (Directorate-General for Trade) successfully excluded India from the proposal, making it worthless for the industry,” one source said.

The sources, including industry figures and European officials, requested anonymity because of the sensitivity of the matter.