To foster sustainable investments in industries pivotal to the green transition, the EU must deliver an impactful and far-sighted industrial policy, while facilitating quicker and more secure resource access. In order to maximise its impact, this strategy should articulate a robust, long-term plan for these key industries, ensuring their sustained operations and continued investments in Europe, alongside new and existing financing mechanisms. Recent financing and incentives initiatives, such as the US Inflation Reduction Act, have made investments in other regions more attractive, highlighting the imperative for prompt action by the EU.

To secure the future of industries that are “made in Europe” by alleviating the energy costs that will fuel them, we ask that policymakers design a European Sovereignty Fund to support industrial competitiveness and decarbonisation. This should be accompanied by a lending platform for strategic raw materials under the European Investment Bank. An effective EU industrial strategy should be spearheaded by an Executive Commissioner Vice-President, providing horizontal oversight across various Directorates-General (DGs) to secure coordination and effective implementation of relevant EU policies.

Our Director of Circular Economy & Raw Materials, George Karkampasis, explains more below 👇

In view of the increasing demand for aluminium foreseen for the green transition and in order to reach the 2030 benchmarks for domestic raw materials capacities set by the Critical Raw Materials Act (CRMA), we call on policymakers to promote initiatives that could help our industry initiate new capacities and restore previously curtailed capacities.

This includes enhancing circular products and recycling efforts by strengthening the connection between raw materials, clean technologies and products manufactured in Europe. It also includes continuing to build on the momentum set by the Green Deal Industrial Plan, in particular the Critical Raw Materials and the Net-Zero Industry Acts.

Together we can unlock a real ‘Renovation Wave’ that upgrades the energy performance of existing buildings, in line with the energy-efficiency first principle. To achieve this, a focus on the replacement of building elements that form part of the building envelope, such as windows, curtain walls, cladding and roofing is also essential.

In order to facilitate industrial decarbonisation that is tailored to the needs of electro-intensive industries exposed to international competition, such as aluminium, Europe needs a swift and cost-effective implementation of green energy solutions. In addition, it is crucial to establish an all-encompassing legislative framework to promote investments in decarbonisation technologies.This would entail accelerating the uptake of Power Purchase Agreements (PPAs) by implementing the related provisions agreed in the last Electricity Market Design Reform (EMD), encouraging national or EU public guarantee schemes for PPAs and bringing down the shaping costs of consuming decarbonised electricity by adding more renewable energy to the grid to address the EU energy deficit. The State Aid Guidelines on Climate, Energy and Environment (CEEAG) should also be strengthened to support the consumption of decarbonised electricity and gases.

We should also prioritise maintaining and strengthening existing carbon leakage protection measures, namely the EU Emissions Trading System (ETS) Free Allocation and indirect cost compensation. The new Carbon Border Adjustment Mechanism (CBAM) in its current design does not provide carbon leakage protection for our value chain. It must be tailored to the specificities of the electro-intensive and price-taker status of aluminium. Furthermore, it should fully mirror the carbon costs of the EU ETS and the existing loopholes must be addressed. Therefore: i) the CBAM on aluminium imports should be applied only to direct emissions and (ii) the ETS indirect CO2 cost compensation system must remain as a carbon leakage instrument for electro-intensive industries. CBAM should be phased in with caution, ensuring that at each implementation step the mechanism is working as intended, by preserving a level playing field for European producers while avoiding more carbon leakage by increasing costs for European companies and consumers.

At the same time, the ETS should be reformed to reward circular and strategic industries like aluminium. This should involve the introduction of a separate ETS Benchmarking methodology for aluminium recycling, as well as a separate ETS “Product Benchmark” for alumina production, which would more accurately reflect the level of CO2 emissions reduction performance that can be achieved by these processes.

Our Director Energy & Climate Change, Emanuele Manigrassi, explains more below 👇

To reduce our dependence on third countries and the influx of carbon-intensive imports, the EU should adopt a stronger stance against imports from countries with non-market economies, for instance by efficiently utilising trade defence instruments against unfair trade practices and protecting the Single Market by supporting EU domestic producers.

Despite the European Commission’s commendable efforts in using EU Trade Defence Instruments (TDIs) in accordance with the rule of law, they have proven insufficient in maintaining the necessary level of protection for the aluminium industry. Therefore, a more pragmatic approach for the EU Trade Defence (TD) is needed, including initiating more ex-officio cases, assertively implementing existing EU TDIs and preventing circumvention of trade measures. It is necessary to develop additional measures, such as tariffs, to counteract unfair trade practices, especially from non-market economies.

As evidenced by several OECD reports, the aluminium industry is disproportionally exposed to market distortions (e.g., subsidies) primarily caused by China. This unfair competition undermines the sustainability and growth of the entire European aluminium value chain. To combat global emissions and tackle non-market excess capacity, we must establish a robust EU-US Global Arrangement on sustainable aluminium based on a level playing field in production costs while also permanently removing the US Section 232 Tariffs. Furthermore, the Global Arrangement should serve as a platform to be enlarged to other like-minded partners and potentially lead to the creation of a “climate club”.

Europe must secure its Strategic Autonomy by establishing solid alliances with reliable partners, forging Free Trade Agreements, developing strategic partnerships and creating raw materials clubs.

Our Trade Manager, Helin Öcal, explains more below 👇

The success of European industry hinges on its ability to compete on an equal footing with other global actors, while securing a circular and low-carbon future. We therefore firmly support a swift revision of REACH that balances the critical role of socio-economic analysis with the overall sustainable management of chemicals that does not contradict the EU’s Circular Economy Strategy. We would also welcome a more effective monitoring of imports of semi-finished or finished articles containing Substances of Very High Concern (SVHCs) or Substances of Concern (SoC).