Various geopolitical situations, high inflation rates, energy crisis in Europe, and trade policy changes across the globe influenced the industry to a great deal and kept it on its toes. While some experts have sounded alarm over overall stagnation, some have registered confidence that the increasing focus on the reduction of carbon footprint by governments and other entities will bring about positive changes for the recycling industry across streams.

Meanwhile, the Bureau of International Recycling (BIR) has brought out the World Mirror - December issue and it draws attention to the government-related policy hurdles for recycling businesses and trade. It says the recent months brought some good news, as well as bad news. The good news being the lifting of the export ban on aluminium scrap in Mexico, and the bad being the imposition of a temporary ban on exports of copper in South Africa.

While the voting on the revised waste shipment regulation (WSR), that will introduce new restrictions on EU scrap metal exports, looms large, India is developing quality standards for aluminium trade, which many experts regard as a non-tariff barrier. “Other government-related hurdles include continuing COVID policy tightness in China, where shrinking domestic supply is boosting import volumes. According to latest data, China imported 1.36 million tonnes of copper scrap during the first nine months of 2022, including 167,000 tonnes in September, which equates to an increase of roughly 10 per cent year on year, ” says the report.

Waste & Recycling MEA magazine spoke to industry experts to find out about the current trends that are driving growth in the non-ferrous scrap market.

Sanjeev Phadke, Managing Director, Metaal Europe International, said the Middle East in general and the UAE in particular are encouraging the setting up of recycling industries in the region. “Among other reasons,” Phadke cited, “the region is committed to bringing down carbon emissions,” and pointed out the energy crisis that is affecting production in Europe is absent in the Middle East.

Rami Shahrour, Sharmetal Trading Co, Board Member of the BIR NonFerrous Metals Division, echoed the same sentiment in his comment about the Middle East market, in the BIR World Mirror report. He said, “There’s a clear shift in the Middle East towards sustainability, which has climbed to the top of policy agendas in the region. By looking towards sustainable financing, the Gulf Cooperation Council can seek to become a global hub for new technologies focusing on the green economy.”

It enhances the region’s competitiveness in support of long-term economic growth while simultaneously protecting the environment, he added. He highlighted that the Middle East Green Initiative (MGI), a regional effort led by Saudi Arabia to mitigate the impact of climate change, can boost development of infrastructure needed to reduce emissions and protect the environment.

Phadke said primary metal producers are increasingly using scrap and are ready to pay the green premium. He said, “They feel responsible towards the world and are also quality-conscious. Inclusion of scrap in their final product helps their businesses reduce their carbon emission and also save energy.”

Talking about the emerging trends, Mohan Agarwal, Managing Director, CMR Green Technologies, said the industry is seeing recycled content increasingly being used in the production of wrought aluminium. He said that more and more primary producers are getting into recycling. “Primary producers are also putting up renewable sources of energy to qualify their aluminium as green.”

He noted the demand for low-carbon aluminium is expected to grow exponentially by 2030 and that the aluminium recycling industry is gearing up with vigorous greenfield and brown field expansion projects.

How legislation can support recycling

 Agarwal said the government should implement policies to reduce customs duty to nil, create more recycling hubs and educate people to give away end-of-life products to authorised recyclers instead of accumulating them in their store rooms. These steps will boost the recycling rate, he said.

Dhawal Shah, Managing Director, Metco Ventures LLP, said, “The aluminium recycling industry is strongly linked to the automotive sector. In terms of GDP, the automotive industry contributes close to about 8 per cent. Secondary aluminium thus plays a very important role in the value chain today. Predominantly the secondary aluminum industry is composed of recyclers who make ingots, which are given to the digesters or to the automotive industry. Now, the government is framing policies for the industry to make sustainable growth.”

Commenting on the legislative measures in India, Shah drew our attention to the quality standards that the Indian government is working on for trading aluminium and copper scrap. “With the overarching objective to advance a circular economy, the government is developing standards for aluminium trade to ensure quality input and output. Smelters or processors will have to align themselves to ensure quality. Once the document is out in the public, the secondary aluminum industry is poised to make significant progress.”

Phadke said, “As long as policies have economical benefits for businesses, they become a win-win strategy for all. For successful implementation of policies, there should be benefits that one can draw by complying to those restrictions.”

Kamlesh Jain, Chairman of Jain Metal group, said, governments should streamline the informal waste sector. In many countries, recycling is not done in a proper way - the environmental standards are not met. The focus of legislation should be to give limited licenses for doing business in recycling and ensure compliance to environmental-friendly processes.

When asked about how the demand for electric vehicles in India will play out for the non-ferrous industry, Jain pointed out, “while the growing demand for electric vehicles in India is good news for the copper industry, it is not so for aluminium.” The preferred material in EV lightening is aluminium. However, in order to reduce costs and sale prices, and to render EVs more affordable for mass market use, EV producers in some latest models have turned back to steel.

Anshul Gupta, CEO, PGI Group, said the demand for copper will increase drastically with renewable energy projects having received phillip across the world. The demand for electric vehicles will keep copper afloat in the coming years, he said. “Energy projects will consistently support copper recycling,” he added. Copper has had a rough time in 2022 as the global economy has seen seismic shifts. Macroeconomics factors and geopolitical issues have affected the industry. Gupta was bullish about the recovery of the copper recycling industry. He said, “With challenges come opportunities. The metal recycling industry has always been resilient and the recovery will be swift.”

Countries are now more inward-looking and are considering policies to keep scrap within. Phadke said, “The world is now moving away from globalisation to anti-globalisation. The countries are realising that their resources should be utilised domestically to close the loop. Moreover, no governments want to be blamed for letting scrap shipped out to lenient economies and then be blamed for polluting them. These factors make the nations restrict the export of recyclable scrap.

But how far it is justified and how it should be done need to be put for discussion. The countries should have the capacity to use all the scrap, if not the move will be a failure. “ Nobody wants to keep the scrap indefinitely in their house. Strike a balance between how much to be allowed to export and how much to be kept at home.” “There should be a flow of resources from places where there are excess scrap to places there is shortage.” We should be looking at a achieving a circular economy at a global perspective.

Agarwal said, “We should let free economies function in the most efficient manner possible. Restricting trade is not the way to achieve it.”