Japan Explores E-Scrap Opportunities in Southeast Asia Amid EU Supply Risks

Electronic Scrap

As concerns about European Union (EU) export restrictions grow, Japan is shifting its focus to Southeast Asia for electronic scrap (e-scrap) procurement to mitigate potential supply disruptions. This strategic pivot comes as the EU contemplates extending stringent controls on e-scrap exports, possibly affecting Japan, a nation heavily reliant on these resources for its non-ferrous metal production, including copper.

EU Regulations Tighten, Japan's Response

The recent implementation of the EU's Waste Shipment Regulation (WSR) in January 2023, which restricts scrap metal exports to non-OECD countries for environmental reasons, has raised alarms in Japan. Japanese custom data indicates that in 2023, Japan imported approximately 73,000 tons of e-scrap from the EU, accounting for about 40% of its total e-scrap imports. The Japanese Ministry of Environment highlights the country's dependence on imports to satisfy nearly half of its domestic e-scrap needs.

In response to the EU's policy shift and the consequent supply risk, Japan and the Association of Southeast Asian Nations (ASEAN) signed a circular economy initiative in August 2023, aiming to foster e-scrap procurement and processing in the region.

Challenges in Southeast Asia

Despite these efforts, the transition to Southeast Asian sources is not without challenges. A ministerial meeting between Japan and ASEAN in Laos in September revealed no specific advancements in circular economy discussions. The Economic Research Institute for ASEAN and East Asia (Eria) reported in 2023 that the region's smelting capacity for non-ferrous metals is significantly underdeveloped, with secondary production figures for aluminium and copper being notably low.

Moreover, the Global E-waste Monitor 2024 by the United Nations indicates a stark contrast in recycling rates between Asia (12% in 2022) and Europe (43%). Indonesia, while being the largest e-scrap producer in Southeast Asia, faces severe limitations in e-scrap management and infrastructure, often resorting to landfill disposal.

Conclusion

As Japan navigates these complex international dynamics, the necessity for diversified and secure e-scrap sources is more apparent than ever. The country's move towards Southeast Asia represents a cautious yet hopeful approach to securing the metals essential for its economic stability and technological advancements.