Eurometaux seeks EU policymaker’s aide for domestic producers of aluminium and others in delivering energy transition

Eurometaux, a trade organisation, has called EU policymakers to enable member states to use state assistance to boost local producers of aluminium, zinc, and silicon, which are critical for the transition to low-carbon energy.

The European Union has set a goal of cutting net greenhouse gas emissions by 55 percent by 2030, as a step toward "net zero" by 2050, with plans that include electric vehicles that require aluminium and renewable energy that requires zinc and silicon.

Because of high electricity costs and tight supplies, more than half of the EU's aluminium and zinc smelters have decreased output or closed temporarily, while silicon production has been slashed.

Electricity's portion of manufacturing expenses for aluminium, silicon, and zinc was between 30% and 40% even before the crisis occurred in the closing months of last year.

“The EU has temporarily lost 650,000 tonnes of primary aluminium capacity; about 30% of the total. Europe’s supply gap must be bridged with imports, often with a higher (CO2) footprint,” said Eurometaux in a letter to European Commission President Ursula von der Leyen

Imports also increase reliance on China, the world's largest producer of industrial metals.

The EU should "swiftly construct an emergency state assistance structure that offers clear criteria and norms allowing member states to take immediate action to help national industry" experiencing extraordinary energy costs, according to one policy specified in the letter.

Another option is to employ "national strategic gas reserves" to keep the market stable.

“There is a real risk of further curtailments and closures in our sector, to the detriment of Europe’s strategic autonomy goals,”  the letter said, adding that other energy-intensive industries will be discouraged from investing in decarbonization.

In the medium term, Eurometaux recommends that the EU promotes policies that foster carbon-free electricity corporate power purchase agreements (PPAs).

“It’s hard to make investments in many European member states because you can’t get long-term contracts. The state can play a role in renewable PPAs,” added Cillian O’Donoghue, Director, Energy & Climate Change at Eurometaux.