Constellium Warns EU Recycling Expansion at Risk Amid Scrap Shortage

Constellium may cancel plans to expand its aluminum recycling operations in the European Union, warning that a persistent shortage of scrap metal feedstock threatens the viability of future projects. In comments to Reuters on Tuesday, CEO Ingrid Joerg stated that while the company has multiple recycling investments under review, they will not proceed without a secure supply of the raw material.

Investment Hinges on Scrap Availability

According to Joerg, Constellium is evaluating several potential recycling projects across its packaging, automotive, and aerospace divisions. The scale of these investments could be comparable to or larger than a previous €130 million ($148.82 million) expansion at its facility in Neuf-Brisach, France.

However, the plans are contingent on resolving the scrap shortage, which the industry attributes to significant exports outside the EU. "We have several recycling projects in the pipeline that we are investigating. But if there’s no scrap, they’re not going to happen," Joerg told Reuters.

Policy Doubts and Broader Headwinds

Ad

The warning comes as the European Commission pursues new regulations for scrap exports. The executive body recently dropped a proposal for an export duty, which the industry supported, in favor of limiting outflows through waste shipment regulations. Joerg expressed skepticism that this approach would be effective, noting that many non-OECD countries are seeking exemptions.

This issue adds to a list of challenges for the EU aluminum sector, including the bloc's carbon border-tax scheme and high energy costs. While Constellium welcomed recent changes to the carbon levy, Joerg called for its swift final adoption to prevent loopholes. She also noted the border levy is expected to increase European aluminum premiums, contributing to inflationary pressures.

In contrast, Joerg added that Constellium’s U.S. operations are benefiting from a different regulatory environment, where tariffs and higher domestic scrap retention rates create more favorable conditions.