Achieving net-zero: Bridging the gap between policy and plants

The ongoing global energy crisis has exposed the fragility of our energy systems and supply chains, putting European manufacturing industries, especially the energy-intensive aluminium sector, in a vulnerable position. Despite the growing demand for aluminium in clean technologies like solar panels, batteries, and electric vehicles, the industry is struggling to maintain production levels. In the past year alone, primary aluminium production has declined by a staggering 50%. The energy crisis has also impacted the gas-dependent semi-fabrication and recycling sectors, which are experiencing mounting losses.

This precarious situation is further compounded by the fact that other leading economies offering low-cost energy and high levels of state aid are increasingly attracting decarbonisation investments away from European companies. If Europe fails to act now, there is a risk of excessive dependence on imports and a potential threat to its green commitments. This is particularly unwise given the challenging geopolitical realities. As such, Europe must act swiftly and decisively to ensure that its energy transition can be 'made in Europe' and that the necessary support and framework conditions are in place. Failure to do so could have significant consequences for the industry and the broader economy, making it imperative to address these challenges head-on.

Our industry needs a sturdy and reliable compass to navigate turbulent waters. An ambitious and bold EU industrial policy can provide the necessary direction and framework to reach net-zero by 2050 while remaining globally competitive.

Thankfully, the EU’s recently released The Green Deal Industrial Plan provides an opportunity for Europe to support its industrial sector and drive the transition towards net-zero emissions. However, to achieve these goals, the Plan must have a comprehensive scope that includes all relevant industries, including the aluminium industry. Targeted support for deploying renewable energy infrastructure and encouraging long-term power purchase agreements for energy-intensive industries is crucial. Policymakers must also ensure that the scale of investment is sufficient to bring about real change. Furthermore, setting clear and ambitious targets for European production of raw materials and clean technologies will boost investor confidence and encourage further investments.

While an ambitious industrial policy is essential to reaching net-zero, the aluminium industry must also take proactive steps to accelerate decarbonisation efforts. Achieving our shared goal of net-zero emissions by 2050 requires courageous and concerted action, including the adoption of innovative technologies and practices and a fundamental shift in how the industry operates.

To achieve this, the aluminium industry must prioritize investments in renewable electricity generation through long-term power purchase agreements, enabling a transition away from fossil fuels. Breakthrough innovations to further decarbonize should be at the forefront of the industry's R&D efforts. Finally, we must boost our recycling efforts to reduce the need for virgin raw materials. We are also actively working on establishing science-based decarbonization pathways for the entire value chain, incorporating intermediate milestones, alternative technologies, cost estimates, and necessary enabling conditions to attain net-zero emissions. This sectoral framework will offer companies clear guidance and support to facilitate their decarbonization efforts.

The challenge of achieving net-zero emissions by 2050 may seem daunting, but it is achievable if we act swiftly and decisively. All stakeholders, including producers, investors, and policymakers, must collaborate to bring about meaningful and lasting changes that benefit not only the environment but also the economy. Failing to take action now will have significant consequences for future generations. Instead, let us embrace this opportunity to usher in a green industrial renaissance in Europe, a chance to revitalize the industry and pave the way for a greener and more prosperous future.