EU Launches Trade Surveillance for Metal Scrap
CBAM Weekly – Issue 55
A New Signal for the Carbon Border Adjustment Mechanism
On July 23, 2025, the European Commission introduced a new measure that could be highly significant for the future development of CBAM. Starting January 1, 2026, imports and exports of metal scrap – including ferrous, steel, and non-ferrous metals – will be systematically monitored across the EU. The measure is based on Regulation (EU) 2015/479. Its goal is to better understand trade flows, secure raw materials, and detect potential circumvention strategies early on.
Why This Measure Is Coming Now
Metal scrap plays a central role in climate-friendly production, particularly in the steel and aluminum sectors. Until now, scrap has not been part of CBAM. However, the new surveillance indicates that the EU is increasingly focusing on the entire lifecycle of materials. The Commission is responding to a well-known loophole: EU scrap is exported, processed outside the EU, and returns as a finished product without any carbon pricing. The new system collects trade data and enables detailed analysis of market movements. In addition to climate protection, the EU is also pursuing industrial policy goals: avoiding bottlenecks, promoting the circular economy, and securing strategic resources within the internal market.
A Step Toward CBAM Expansion
The trade surveillance is not part of the current CBAM regulation – but it lays the groundwork for a potential expansion. According to internal assessments, scrap-based products, including recycled steel and aluminum, could soon be included in the CBAM mechanism. This would require traceability of emissions down to the point and location where a metal was first melted and cast into a solid form, as well as origin declarations for recycled materials. At the same time, the focus on anti-circumvention strategies is intensifying. The EU aims to prevent raw materials from being shipped abroad, processed, and reimported into the internal market without CBAM costs. The new monitoring system creates the data foundation to uncover such practices.
What Does This Mean for Companies?
The trade surveillance will be relevant for numerous industries: recyclers, traders, and manufacturers must prepare for new reporting obligations. Companies using scrap-based intermediate products should also analyze their supply chains for potential future CBAM obligations. The EU’s message is clear: the CO₂ footprint will be traced along the entire value chain. Companies that bring transparency into their data and processes today will gain an edge. This is not only about meeting future reporting requirements but also about improving strategic planning in international trade.
Conclusion
With the new trade surveillance for metal scrap, the EU is directly addressing one of the biggest weaknesses in the current system: the export of scrap without CBAM costs. This measure creates, for the first time, a foundation to systematically track the origin and processing of recycled metals. For companies, it is a clear signal that CBAM may soon cover these materials and their supply chains. Acting now allows businesses to improve data quality and secure a competitive advantage.
Support in Alignment
If you would like to know how the new trade surveillance or a possible CBAM expansion could affect your business, feel free to contact us directly at helge@kolum.earth.