Position: Circular Economy Act – Connecting Competitiveness, Resilience, and Climate Protection
June 2026 | The European Commission’s forthcoming Circular Economy Act (CEA) represents one of the most consequential legislative initiatives of the current mandate. Properly designed, it has the potential to simultaneously advance three of the European Union’s paramount strategic objectives: industrial competitiveness, resilience, and climate neutrality. For the steel industry in Germany, the CEA is therefore not a supplementary environmental measure. It is a central instrument of European industrial policy.
Steel is among the most circular materials in the world. It can be recycled indefinitely without any degradation of its material properties. End-of-life collection rates already exceed 90 %, and more than 30 % of German steel production is today based on the secondary steel production route that relies on ferrous scrap input. The environmental and resource efficiency dividends are substantial: recycling one tonne of ferrous scrap into new carbon steel avoids the consumption of 1.4 tonnes of iron ore, 120 kg of limestone, and 740 kg of coking coal, leading to reduced dependency on raw material imports. Furthermore, using scrap instead of raw materials reduces energy consumption and emissions. Last but not least, the steel production delivers valuable by-products to other industries e.g. cement. These are not marginal gains, but transformative contributions to EU climate and resilience policy.
However, also worldwide increasing scrap demand, fragmented regulatory framework conditions across Member States, insufficient scrap retention within the EU, unresolved barriers to the use of industrial by products, and inadequate investment signals collectively prevent the sector from realising the circular transition at the pace and scale required. Therefore, the German steel association calls on the European Commission to address under the CEA:
- Secure Europe’s domestic scrap base through a qualitative and quantitative scrap monitoring and develop new scrap sources – including from ship and energy infrastructure recycling – and treatment operations.
- Harmonise the regulation for by-products and end-of-waste (EoW) across the EU Single Market and enable the full use of steel industry by-products as contributors to industrial symbiosis.
- Avoid mandatory recycled content requirements that disregard structural constraints of steel production routes, scrap availability, and product quality standards. Instead reward low-carbon and circular performance. Stimulate demand for secondary and low-carbon steel products through targeted public procurement.
- Improve the investment conditions for advanced sorting infrastructure and circular production capacity.
The CEA must function as a horizontal enabling framework: fully coherent with the Clean Industrial Deal, the Steel and Metals Action Plan, the Industrial Accelerator Act, the Critical Raw Materials Act, and the Ecodesign for Sustainable Products Regulation that position circularity as a driver of European industrial competitiveness, rather than solely as a compliance and environmental obligation.
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