The European Union’s decision to abandon a proposed duty on aluminium scrap exports and instead rely on environmental regulations could restrict supplies to recyclers in Thailand and Malaysia from May 2027, potentially reshaping flows of secondary materials into Asia.
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A draft of legislation implementing the EU’s Waste Shipment Regulation found that Thailand and Malaysia, along with India, had not met the environmental requirements needed to continue importing metal waste directly from the bloc, Reuters reported on 11 September.
The finding has not yet been formally adopted. The European Commission is expected to publish its first list of approved countries and waste streams by 21 November, ahead of the new export regime taking effect on 21 May 2027.
The rules could have significant implications for Southeast Asia, where countries including Malaysia and Thailand have developed sizeable industries processing imported aluminium scrap into metal used by manufacturers.
Malaysia was the largest destination for US aluminium scrap in the first 11 months of 2024, while Thailand ranked third, according to US trade data cited by commodities pricing agency Fastmarkets. Both countries also import scrap from Europe and other markets.
The EU’s shift comes as governments increasingly seek to retain recyclable materials for their own industries. Aluminium scrap has become particularly valuable because producing metal from recycled material uses about 95 per cent less energy than producing primary aluminium from mined bauxite.
EU aluminium scrap exports have increased by 51 per cent since 2019, reaching a record 1.26 million tonnes in 2025, according to a draft European Commission proposal seen by Reuters. Most shipments have gone to Asia.
The Commission had considered imposing a 15 per cent export duty for three years, but abandoned the proposal after exemptions, including for India and Vietnam, would have left it covering only about half of EU scrap exports.
India accounts for approximately one-third of those exports and had lobbied Brussels for relief from the proposed restrictions as the two sides prepared to finalise a trade agreement.
The Commission said it concluded that the same objective could be achieved through the Waste Shipment Regulation. Earlier this month, the office of EU industry chief Stéphane Séjourné said it was working on a delegated act that would prohibit waste exports, including aluminium scrap, to non-OECD countries, with exceptions for some EU candidate countries.
The measure is expected to undergo public consultation before possible adoption by the end of 2026.
Southeast Asian applications under review
Under the regulation adopted in 2024, exports of non-hazardous or “green-listed” waste to countries outside the Organisation for Economic Co-operation and Development (OECD) will generally be prohibited from May 2027.
A non-OECD country may continue receiving particular types of waste if it demonstrates that they will be handled in an environmentally sound manner. Approval will be granted separately for specific waste streams rather than automatically covering all recyclable materials.
Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are among the Southeast Asian economies that submitted applications. Laos applied after the initial February 2025 deadline, according to the European Commission’s implementation records.
The Commission said applicants must provide evidence concerning their waste-management laws, enforcement systems and ability to treat imported materials safely. European exporters will also be required to arrange independent audits of overseas facilities receiving their waste.
The draft reported by Reuters indicated that Thailand and Malaysia had so far failed to meet the conditions for importing metal waste. The Commission has not publicly released its full assessment, and it remains unclear whether either government could submit additional information before the final list is adopted.
The distinction between OECD and non-OECD markets also places Asian recycling centres under different regulatory regimes.
Japan and South Korea, both OECD members, will remain eligible to receive EU waste under rules broadly similar to those governing shipments within the bloc. The Commission can nevertheless suspend exports if it finds that rising shipments are causing environmental harm or are not being managed properly.
Southeast Asian importers, by contrast, will require specific EU approval even if individual recycling facilities meet commercial or industry standards.
Region tightens its own controls
The EU measures coincide with efforts by Southeast Asian governments to restrict poorly regulated waste imports following the diversion of shipments to the region after China closed its market to most foreign waste.
Thailand banned imports of plastic waste at the start of 2025, after receiving more than 1.1 million tonnes between 2018 and 2021. Malaysia tightened its plastic-waste import rules in July 2025 and imposed an immediate prohibition on electronic-waste imports in February this year.
The European regulation separately imposes a complete ban on plastic-waste exports to non-OECD countries from 21 November, regardless of whether a country applies to continue receiving other materials.
The Commission said the prohibition was intended to stop the EU from exporting waste to countries that might lack the capacity to manage it sustainably. Malaysia and Indonesia have been among the principal Asian destinations for European plastic waste, according to recent trade-data analysis.
Metal recyclers, however, argue that aluminium scrap used as industrial feedstock should be distinguished from contaminated or difficult-to-process waste.
Recycling industry groups have warned that blanket restrictions could leave Europe with more scrap than its smelters can absorb, depressing prices and weakening the economics of collecting and sorting recyclable material.
European aluminium producers take the opposing position, arguing that Asian buyers can offer higher prices and that the loss of scrap threatens European recycling plants and the bloc’s industrial decarbonisation plans.
