Europe’s Scrap Shortage: Steel Recycling’s 2030 Challenge

Steel is one of the most recycled materials in the world - and essential to delivering a low-carbon economy. Yet even with Europe’s high recycling rates, scrap alone will not meet the region’s decarbonisation targets. Industry forecasts show that without new sourcing strategies and production methods, scrap availability will fall short of demand - creating a significant supply and infrastructure challenge for steelmakers, recyclers, and policymakers.

The Current Scrap Supply Landscape

Globally, recycled steel meets around 32% of total demand. With improved collection, sorting, and recycling infrastructure, this could rise to 46% by 2050 - but it still leaves more than half of demand reliant on virgin production.

The bottleneck isn’t just collection. Much of the steel in use today is tied up in buildings, vehicles, and infrastructure for decades before it becomes available for recycling. Even when scrap is recovered, contamination or mixed grades can limit its use in high-spec applications such as automotive or engineering steels.

"Recycled steel meets just 32% of global demand today - and will likely reach only 46% by 2050." - Source: Reuters, Why relying on recycled steel would derail Europe's drive to decarbonise

Europe’s EAF Growth and Rising Scrap Demand

As part of the net-zero transition, European steelmakers are investing heavily in electric arc furnace (EAF) technology. Unlike blast furnaces, EAFs can run on renewable electricity and use scrap as their main feedstock, cutting emissions significantly.

EUROFER projects that by 2030, EAFs could account for up to half of Europe’s steel production. This will sharply increase demand for high-quality scrap - the type that EAFs require to maintain output and meet quality standards.

The 2030 Supply Gap

Industry analysts warn that by 2030, scrap supply growth will not keep pace with this new demand. The result could be:

• Price volatility: More competition for premium scrap could drive up costs.

• Import reliance: Greater dependence on scrap imports to meet production needs.

• Carbon setbacks: Where suitable scrap is unavailable, production may revert to higher-emission virgin steelmaking.

This is already visible in trade flows - with tighter markets for certain high-grade scrap types.

Strategies to Bridge the Gap

To maintain decarbonisation momentum, steel sector stakeholders are focusing on four priority areas:

1. Scrap Content Transparency - Introduce reporting requirements so steelmakers disclose the proportion of scrap in finished products. This allows tracking, benchmarking, and policy incentives.

2. Scaling Low-Emission Virgin Steel - Support commercialisation of hydrogen-based direct reduced iron (DRI) and molten oxide electrolysis to produce virgin steel at lower emissions.

3. Improving Scrap Quality - Invest in advanced sorting, pre-processing, and contamination control to increase the proportion of recovered scrap suitable for high-grade uses.

4. Managing Trade Flows - Coordinate policies to secure supply for domestic EAFs without destabilising global scrap markets.

Implications for the UK Steel and Scrap Industries

The UK produces around 10 million tonnes of steel annually and exports a large share of its scrap. This creates a dual challenge:

• For steelmakers: EAF transition is essential for competitiveness under tightening carbon rules, but securing feedstock will be a core strategic priority.

• For recyclers: Rising demand presents growth opportunities but will also bring stricter quality requirements and competition from overseas buyers.

• For policymakers: Decisions on export controls, infrastructure funding, and innovation support will directly influence the UK’s role in Europe’s low-carbon steel supply chain.

The Road Ahead

Scrap will remain the backbone of low-carbon steelmaking, but Europe cannot rely on it alone. A resilient strategy combines maximum scrap recovery and use with rapid deployment of low-emission virgin steel technologies. Addressing the 2030 supply gap now will reduce market risks, protect industrial competitiveness, and keep Europe’s decarbonisation targets within reach.