UAE-based Global Aluminum Alloys (EGA) is "extremely disappointed" with the EU's decision to abandon the proposed 15% export tax on aluminum scrap, and warns that this policy change could impact the company's final investment decision on the expansion of its aluminum recycling business in Germany.
EGA's Chief Financial Officer, Paul Kildermore, said that the company has invested a significant amount of capital in the process of increasing aluminum recycling rates in Europe, but when industrial policies are affected by broader trade negotiations, it will increase the uncertainty of enterprise investment.
The EU withdrew its proposal to impose a 15% export tax on aluminum scrap earlier this month. The measure was originally intended to reduce the flow of aluminum scrap out of the EU and keep more scrap aluminum in Europe, providing raw materials for local recycling and reprocessing industries.
Sources said that the EU is concerned that this measure might make the final signing of the free trade agreement with India more complicated. The European Aluminum Industry Association also expressed strong disappointment and dissatisfaction with the policy withdrawal, indicating that the European recycling industry is highly sensitive to aluminum scrap supply policies.
EGA has been continuously expanding its aluminum recycling operations in Europe over the years. The company announced last week that it had completed the acquisition of 80% of the shares of Italian Eco Green. The company is responsible for collecting, sorting, and selling over 70,000 tons of recycled aluminum annually.
In 2024, EGA acquired the German recycling company Leichtmetall and announced a large-scale expansion plan in December last year, aiming to increase its scrap sorting capacity by 110,000 tons per year and add 150,000 tons per year of smelting and casting capacity, equivalent to a sixfold expansion of its existing business.
However, the German project has not yet completed the final "construction decision". Kildermore said that the uncertainty in the policy environment will directly affect whether the company proceeds with the investment. He pointed out that it cannot be asserted that without the export tax project, the investment will not be made, but from an economic perspective, this change is a net negative factor for the project.
