Scrap Is the New Gold, but Europe Is Still Shipping It Abroad, Says Tykač Executive
Seznam zprávy, Jiří Zatloukal, 17. 5. 2026 Link to the original article
Steelmaking is undergoing a major transformation and scrap is becoming a strategic raw material whose export Europe will soon ban, says Libor Černý, head of the steel division at Tykač’s Sev.en Global Investments.
A steelworks in Cardiff, Wales, electric arc furnaces, ships moving every two weeks between Norway and Finland carrying scrap and finished steel. This is the kind of operation managed under the Czech group Sev.en Global Investments by Libor Černý, head of its steel division.
And the British base of the Czech group in Cardiff is the springboard for a much more ambitious step. Sev.en wants to acquire the nationalised British steelworks and become the largest steel producer in the United Kingdom.
Nationalised assets
The British government found itself in a difficult position when, last April, it effectively nationalised the Scunthorpe steelworks in eastern England, the last major, and also highly loss-making, blast furnace operation in the country. The previous owner, the Chinese group Jingye, rejected state aid of GBP 500 million and was preparing to shut the furnace down.
A few days ago, Keir Starmer’s government announced that it wants to legalise its control over the steelworks and take over the operation fully. Starmer considers steelmaking to be a matter of national interest. Taxpayers have already spent GBP 419 million, or CZK 12 billion, on keeping the company running, while further sums will have to be invested in modernising the furnaces.
Tykač’s group has offered to take over the operations. “We are convinced that we can be a reliable partner for the government,” Sev.en Global Investments CEO Alan Svoboda told The Guardian. The group plans to invest GBP 100 million in its steelworks in Cardiff and has indicated that it could invest further “hundreds of millions of pounds” as part of acquisitions.
Tykač is already the largest producer of steel in electric arc furnaces in Britain. He employs around 1,600 people directly, with another approximately 5,500 jobs linked to his steelworks. “We see Britain as an interesting steel market,” Libor Černý, director of the steel branch of Tykač’s group, confirms in an interview with Seznam Zprávy.
Steelmaking in Europe has been in decline in recent years, mainly because of cheap imports from Turkey, China and other countries. These countries often subsidised prices in order to compete with European steelworks. But this is gradually changing, as both the European Union and Great Britain are introducing protective measures aimed against dumping.
A levelling of the market, meaning rules aimed against countries that import cheap and subsidised steel into Europe, will help European producers, including British ones. They could become significantly profitable again, even though they will be producing steel in an environmentally friendly way. “It is a myth that green steel is more expensive. The customer pays one price, which is the market price. For market prices, it simply does not matter whether the steel is green or not,” he adds.
Brussels’ three weapons
Import quotas have applied to steel since 2018. However, their mechanism was not effective. The quotas increased slightly, while European demand was falling. European steelworks paid the price, with capacity utilisation at steelworks falling from around 80 percent to 60 percent. “After strong pressure from producers and the victory of common sense, the existing quotas were reduced by an average of 47 percent, almost by half,” says Libor Černý, head of the steel division at Sev.en Global Investments.
Above the quota, a 50 percent tariff will newly apply. Import quotas into the EU will fall by 14 million tonnes per year, which corresponds to approximately 10 percent of European consumption. The measure is partly a response to Trump’s tariffs. Without protection of the European market, cheap Chinese, Indian or Algerian steel, originally headed for the US, would flow into the European continent.
“Algeria is a less well-known case than China. Ten years ago, it was still importing steel, today it exports it on a large scale. They have enough natural gas, they produce through the direct reduction of iron ore, they are relatively cheap and close by,” says Černý.
Carbon border adjustment mechanism, CBAM. This mechanism taxes steel produced outside the EU with a higher carbon footprint. Emission allowances did exist until now, but European steelworks received free allocations from governments, so in effect they did not really work. This is changing, because the allocations will decrease every year, by 2.5 percent in the first year and then faster, while the “tariff” on non-green imported steel will increase at the same time. “If Europe pushes its own producers into green investments and at the same time allows imports of steel that is not green, it is nonsense. It simply cannot work that way,” Černý comments.
Melt and Pour rule. This measure, whose introduction is being considered in autumn this year, is expected to be the most effective. Until now, the origin of a steel product has been considered to be the place where it was last rolled. This opens space for circumvention, because Chinese steel is imported into Europe as a semi-finished product, rerolled here, and the product is then “made in EU”. “After the introduction of the melt and pour rule, origin will be determined by the place where the steel was melted and cast,” he adds.
Green Tykač
The economics of an electric arc furnace, which melts scrap instead of iron ore, can genuinely work. For one tonne of steel, a traditional blast furnace consumes approximately 1,600 kilograms of iron ore, 500 to 600 kilograms of coke and 200 to 300 kilograms of limestone, around 2.5 tonnes of input material in total. “An electric furnace needs 1,100 kilograms of scrap and almost nothing else. Less material, less transport, fewer employees. It is paradoxical, but more environmentally friendly steel production through electric arc furnaces is not more expensive than production through blast furnaces,” says Černý.
In the case of the group’s Norwegian steelworks, local electricity plays a key role. It comes 98 percent from hydropower and costs significantly less than in continental Europe. The result is one of the lowest carbon footprints in the industry.
Green steel from these Norwegian furnaces is now also starting to flow into the Czech Republic. The first domestic customer is Feri from Hradec Králové, owned by Ivo Novák. The company operates as a subcontractor on major Czech construction projects. “It is a company that understands that sooner or later it will be good to have a green source of steel. Today, nobody in the Czech Republic or Poland is very interested in this, but it will come. Customers will ask, contracting authorities for public projects will ask,” Černý adds.
Tykač also agreed to a rather illogical step in support of his furnaces. He allowed Třinecké železárny to send their people to visit Sev.en’s Norwegian steelworks, even though they are direct competitors. “We allowed them to come because it is in our interest to have more electric steelmakers. They have specific needs, such as scrap, and we can jointly promote our interests,” says Černý, who worked for a long time in the Ostrava steelworks. Together with the Třinec business figures led by Tomáš Chrenek, they will lobby for support for such companies and for the protection of European steel.
A strategic raw material
In addition to the existing regulation in the sector, another major topic is emerging, one that is not yet very visible: the regulation of scrap exports from Europe.
With the transition from blast furnaces to electric furnaces, scrap, rather than iron ore, will become the key raw material. Today, however, Europe exports it on a large scale, roughly 15 to 20 million tonnes per year, more than half of which goes to Turkey. Great Britain exports another approximately 10 million tonnes. “If scrap exports are not regulated, European producers that invest in electric furnaces may find themselves without material to produce from. I am certain that measures will need to be adopted to ensure that scrap does not disappear from Europe. It will become a strategic raw material,” says Černý.
Steel is present in infrastructure, transport, construction and the defence industry, which is growing in Europe in the context of the security situation. Scandinavian countries are currently building infrastructure in an east-west direction to complement the existing north-south axis. According to Černý, they will need a lot of steel, which means an opportunity for Sev.en Global Investments.
Britain is taking a similar path. The government there wants to increase the share of domestic production in total consumption from 30 percent to 50 percent. To do so, it needs not only protective measures, but also functioning steelworks so that it can buy steel from its own producers.
In this context, Sev.en, whose founder Pavel Tykač built his group primarily in the coal business, is becoming a surprising player in the green sector.