Will the European Commission be able to seize the opportunity of green aluminium?

Europe’s need for aluminium is constantly growing. If the Commission will have the foresight to promote the supply of low-carbon footprint non-EU primary aluminium and to support the virtuous secondary metal, aluminium downstream might indeed become a pillar of the decarbonisation of the European industry

We express our appreciation for the proposal of the European Commission to put in place new tools to adequately deal with the disruptions caused by the usual suspects, such as, many Chinese companies, operating with great confidence in the market, creating by all kinds of contrivances conditions of unfair competitiveness for the aluminium value chain in the EU. For a long time we have been fighting in every way for a much more effective and reactive EU trade defence against the invasion of raw materials and products related to our supply chain; for too many years, for example, the downstream of light metal has been penalized by an irrational duty on raw metal, built on a system of unreasonable customs coding, artfully created in 2009, which put together and on the same level primary metal of all types, origin, production technologies and CO2 footprint and secondary metal, which has a completely different production cycle, variety of uses and market profile. The latter is a substantial point, because in the EU we have a shortage of primary metal production, it is necessary to import around 70% of the requirement; it is necessary to favour its flow because, despite the duty subsidy, the big smelters are slowly disappearing and it is necessary to think that in the years to follow this demand for primary metal will be even stronger. In short, today more than ever it is impossible to understand the reasons for a protection which does not protect anyone, but damages downstream for more than one billion euros a year, as studies by Luiss University have shown.

On the other hand, we have an excellent production system of virtuous secondary metal, based on decades of consolidated experience of refiners and remelters, which offers excellent metal from recovery and recycling. This is an industry which must be safeguarded with appropriate tariff protections, because in turn it helps to preserve and revitalise the heritage represented by the metal to be recovered in the territories. This is why the positions which the new Commission is finally pursuing with clarity, good determination and without so much embarrassment are so appropriate, with increasing attention to asymmetric competition on semis imported at below-cost conditions, mostly from China and, as a consequence of the Covid-19 emergency, to the threat of being invaded by primary with a very high carbon footprint at large and in search of use due to uncontrolled overcapacity. At last we are talking about concretely weighing the CO2 footprint of the metal in order to reward virtuous production, we have always upheld these positions, we said ahead of the times that for a scenario of serenity in the European Union there could be no alternative to the indispensable collaboration of our extensive downstream with large non-EU suppliers of excellent primary metal, such as Rusal and the Gulf countries. And just a few years ago some enlightened thinkers accused us of excessive benevolence towards Gulf producers; perhaps they had no confidence, or no knowledge, of the growth forecasts for our metal, which in 2050 should reach a global consumption of 150 million tons, consisting of 100 million tons of primary metal and for the rest, secondary metal. Current consumption is around 100 million tons, two thirds of which is met by primary aluminium and the rest by recycled metal.

We believe it is right and correct to reward all possible decarbonisation pathways in the supply chain, we also believe that, thinking about those 100 million tons of primary aluminium expected to be needed in a few decades and taking into account that today only 10% of primary aluminium is produced using hydroelectric power, the one with the lowest carbon footprint among the available ones, each measure should be evaluated with great wisdom and balance, in particular thinking about avoiding heavy measures from an economic standpoint which could make our downstream less competitive. We believe at this point that advanced economies must first select virtuous producers, but also commit to helping emerging economies to convert to clean energy production by improving existing technologies and carrying out research and development to discover new ones. Aluminium is the ideal material for an environmentally friendly and circular future in terms of resource conservation, so it is necessary to support its strategic value chain for the recovery of green Europe. Green aluminium is on the doorstep, it is a great result to have built an industrial philosophy, for our metal is an ambitious historic challenge which deserves a very careful, balanced and shared planning and road-map.