2030 Energy and Climate Package: EEA expects concrete EU measures

In response to the EU Council Conclusions on the 2030 Climate and Energy package, the European aluminium industry welcomes the confirmation that measures to stop investment leakage will continue after 2020. After a decade of disinvestment, it is now high time to deliver the concrete measures that will rebuild European manufacturing’s leadership in low carbon solutions.

Director-General of the European Aluminium Association (EAA) Gerd Götz commented: “Today, EU Heads of state and government sent a clear signal that high energy costs in Europe must be addressed in the post-2020 era. In particular, we strongly welcome the Council’s commitment to address indirect carbon costs. These costs are six times higher than direct carbon costs for the aluminium industry and have already cost Europe more than a third of its aluminium production and seriously impacted the entire value-chain. The EU is now import-dependant for a material that is essential to all innovative, sustainable and low-carbon solutions. What is crucial now is for EU leaders to ensure rapid deployment of effective compensation for these costs under a reformed ETS.”

One year ago, the European Commission’s Fitness Check of the aluminium industry showed that EU climate and energy rules add 11 per cent of total production costs, a cost burden our competitors outside Europe do not have to bear. This makes aluminium one of the industries most exposed to carbon and investment leakage and as a result, production continues to leave Europe despite growing demand. Since 2007 almost 50 per cent (11 out of 24) of aluminium smelters in Europe have closed or have seen their activities curtailed. Aluminium processing plants have also experienced a significant loss in capacity.

“We hope that this step forward confirms a shift in political priorities towards finally correcting fundamental flaws in the current legislative framework. In addition to being a driver of sustainable economic growth, with demand in Europe expected to almost double by 2050, aluminium is vital for lightweight and fuel-efficient vehicles, energy-efficient buildings, and environmentally-friendly packaging. It is a shining example of how industrial growth and climate objectives can be mutually-reinforcing, a fact which should be reflected in all areas of EU policy”, Gerd Götz added.

According to EAA, cost pressure of EU policies and regulations has put the European aluminium industry at a competitive disadvantage to its global rivals. This is the key finding of a study undertaken for the European Commission in the framework of its fitness check on the aluminium on the aluminium sector published in November 2013.