Brussels, 07/11/2013 (Agence Europe) - A study carried out by the Centre for European Policy Studies (CEPS), at the request of the European Commission, highlights the pressure on the aluminium industry of the costs of EU policies and regulations.
The CEPS study, which was published on 6 November, is the first ever analysis of the costs borne by the aluminium industry due to EU legislation over the last ten years in the areas of energy, the environment and climate, competition and trade policies. The study focuses on 46 production plants representing over 60% of Europe's production capacity, and it concludes that pressure from the costs of EU policies and regulations has put the aluminium industry at a competitive disadvantage internationally.
“The results clearly show the significant negative cost impact of some EU rules on our ability to compete internationally. Europe's demand for aluminium solutions is growing, while production in Europe collapses. We are grateful to Vice-President Tajani and DG Enterprise for leading this assessment. It is now time for a strong and immediate political response”, said Gerd Götz, Director General of the European Aluminium Association (EAA).
The study highlights the difference between EU smelters which are still protected from the cost of EU policies - due to long-term contracts concluded before implementation of the emissions trading system (ETS) - and smelters fully exposed to EU rules for the internal electricity market and the ETS. The smelters fully exposed to EU rules have become less competitive globally and face additional costs of up to €228 per tonne of aluminium - in other words, 11% of total production costs, including raw materials, says EAA in a press release.
The CEPS study underlines that indirect ETS costs (the costs of CO2 passed on by electricity producers in power bills) and costs resulting from support for renewable energy are the main reasons for the shortfall in competitiveness of the aluminium industry, says EAA. This lack of competitiveness has resulted in a decline of over a third of Europe's primary production capacity through plant closures and curtailments between 2007 and 2012. This loss of production also affects entire industry clusters at the regional level and threatens many downstream facilities and SMEs.
To reverse this trend, EAA advocates concrete measures to ensure competitive energy prices through sound industrial, climate and energy policies. It also advocates unlocking recycling potential and fostering Europe's circular economy, as well as maintaining the EU's industrial value chain, promoting innovation and boosting demand for resource-efficient solutions.
“We are strong supporters of the EU 2020 objectives and the ETS as the market-based instrument to achieve climate change-related targets. But it is high time for a pragmatic review of EU climate and energy policies to stop carbon leakage and further de-industrialisation, while maintaining jobs and technology leadership in Europe. Europe cannot afford to lose an industry that contributes to the transition to a low-carbon and resource-efficient economy”, states EAA. (EH/transl.fl)