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EU Critical Raw Materials Act is step in the right direction to boost European sovereignty in raw materials supply

Date

17 Mar 2023

Sections

Trade & Society

European Aluminium, the voice of the entire aluminium value chain in Europe, welcomes the recent release of the Critical Raw Materials and Net-Zero Industry Acts. Together, these proposals constitute a long-overdue first step towards recognising the need for a European industrial policy that helps secure access to the raw materials needed to underpin the twin transition and a series of other strategic priorities. European Aluminium emphasises aluminium’s crucial and widely recognised role as a ‘strategic raw material’ in the green transition and urges policymakers to include it in the Critical Raw Materials Act.

Europe’s increasing reliance on quasi-monopolistic third-country suppliers constitutes an unacceptable vulnerability in today’s precarious geopolitical climate. The proposed Critical Raw Materials Act represents a positive first step towards addressing this issue. We welcome the Commission’s recognition of the need for trade defence when justified as well as their proposals for reducing administrative burdens and providing support for access to finance. However, we are perplexed that aluminium, which plays a crucial and irreplaceable role in the green transition, has been omitted from this proposal. If this future legislation is to achieve its stated ambitions, it must be designed so as to encourage and facilitate European production in order to secure the future of Europe’s industrial base and guarantee an appropriate degree of strategic independence. With this in mind, we will work closely with the European Council and Parliament with a view to including aluminium in the Regulation, mirroring the value chain approach laid out in the Net-Zero Industry Act,” comments Paul Voss, Director General of European Aluminium.

Aluminium is set to play a critical role in Europe’s transition to a sustainable future, as it is a key component in nearly all clean energy technologies prioritised in the Net-Zero Industry Act, including solar PV systems, wind turbines, grid technologies, and batteries.

According to a recent study by Katholieke Universiteit Leuven, aluminium demand is expected to grow 30% by 2030 thanks to aluminium’s use in clean technologies, highlighting the material’s strategic importance in achieving the EU’s climate targets. Consequently, European Aluminium stresses the need to preserve and enhance the capacity to produce and recycle aluminium in Europe.

The European aluminium industry is facing a critical setback due to the ongoing energy crisis. As a result, primary aluminium production has plummeted by 50%, and if the issue remains unaddressed, it could lead to a permanent closure of capacity. Unfortunately, this crisis adds to the long-term decline of Europe's aluminium industry, which has already lost one-third of its production capacity over the past 15 years. Allowing the replacement of this capacity by high-carbon footprint production in countries like China would mean that Europe is actively contributing to the increase of global emissions, thereby compromising its strategic autonomy and economic growth.1

Furthermore, Europe's gas-reliant semi-fabrication and recycling sectors are also experiencing significant declines in profitability. To make matters worse, leading economies such as the United States have implemented initiatives offering low-cost energy and substantial state aid, attracting decarbonisation investments away from European firms and boosting profitability for existing aluminium production in these geographies.

Given these challenges, Europe must take swift action to support its aluminium industry. This support should include investments in low-carbon energy sources, infrastructure upgrades, and policies that incentivise decarbonisation. By doing so, Europe can ensure that its aluminium industry remains competitive, profitable, and environmentally sustainable.

With the right scope, scale and ambition, the Critical Raw Materials and Net-Zero Industry Acts can simultaneously reinforce Europe’s status as the global leader on climate and provide vital support to industry. By investing in European raw materials production and recycling, we can strengthen our strategic autonomy and security of supply, and pave the way for a greener tomorrow. We stand ready to collaborate with the co-legislators to ensure that the Act includes aluminium and delivers on its promise to create a supportive regulatory environment for raw material supply chains and the net-zero industries they serve,” concludes Voss.

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About European Aluminium:

European Aluminium, founded in 1981 and based in Brussels, is the voice of the aluminium industry in Europe. We actively engage with decision makers and the wider stakeholder community to promote the outstanding properties of aluminium, secure growth and optimise the contribution our metal can make to meeting Europe’s sustainability challenges. Our 100+ members include primary aluminium producers; downstream manufacturers of extruded, rolled and cast aluminium; producers of recycled aluminium and national aluminium associations, representing more than 600 plants in 30 European countries. Aluminium products are used in a wide range of markets, including automotive, transport, high-tech engineering, building, construction and packaging. For media requests: Kelly Roegies, Senior Manager Communications, M: +32 471 80 20 98, roegies@european-aluminium.eu.

1 The carbon footprint of Europe’s primary production is much lower than the global average, with only 6.8 kg of CO2 emissions per kg of aluminium produced compared to the global average of 16.1 kg of CO2.

 

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