As a European industry association, our focus for 2020 is ensuring that new policymakers in the reconstituted European Commission and Parliament understand our industry. Our agenda features a comprehensive set of policy recommendations across four domains: circular economy, trade, energy & climate, and innovation. First, we must convince more politicians that aluminium is a strategic industrial sector to preserve Europe’s competitiveness and critical for the transition to a climate neutral and circular economy. We will also pay close attention to the new policy initiatives that will be introduced as part of the European Green Deal, presented as Europe’s growth strategy for a resource-efficient and competitive economy to make Europe the first climate-neutral continent by 2050.

The European aluminium industry has the ambitious aim of becoming a frontruner in this process. That’s why we have not only developed a long-term vision towards 2050 but also a complementary mid-term recycling strategy that set out different scenarios of how the sector can contribute to Europe’s climate and growth conditions. They also outline the conditions necessary for the sector to realise its full potential for decarbonisation and recycling. Establishing free and fair trade conditions Our data shows that the increasing aluminium demand in Europe will continue to rise by up to 40% by 2050, driven by high demand in many applications (mobility and transport, building and construction, packaging, to only name the largest sectors). Unfortunately, the long-term growth opportunities are overshadowed by short-term challenges in trade and energy that pose serious threats to our industry. Recent developments on the world trade scene are posing serious threats to our industry. The number one challenge to tackle remains subsidised Chinese excess capacity. Last year, the OECD released a landmark report on the aluminium value chain, which shows just how much support Chinese producers receive: 70 billion dollars between 2013-2017, with 85% of this benefiting just five Chinese companies.  The subsidised aluminium production in China undermines European production, distorts global markets, and depresses global aluminium prices, threatening the competitiveness of the European aluminium industry. Thanks to state support, China’s primary production increased to almost 60% of worldwide production in just over a decade, which also led to a boom in the export of semi-fabricated products to the EU. Moreover, these Chinese imports reach our market at unfairly low prices – up to 30% below the market price. The current trade defence measures on aluminium wheels, foil, and radiators are not sufficient as they only cover 5% of the EU production, and we will continue to work with the European Commission to intensify its efforts to safeguard the future of the industry. Together with other industries, we are also calling on governments to reform the WTO to better deal with today’s trade challenges. The reformed WTO rules should protect the multilateral trade system, assess the impact of government support throughout the whole value chain, and develop a better accounting system for the influence of state actors. Boosting recycling of aluminium Our projections show that up to nearly 50% of the European aluminium demand can be met with recycled aluminium by 2050. However, access to aluminium for recycling in terms of quantity and quality will be a big challenge that prohibits us from achieving full circularity. The Commission’s upcoming Circular Economy Action Plan 2.0 should, therefore, create the right incentives to promote circular business models, taking into consideration the enormous potential lying ahead for the European aluminium recycling industry. Ensuring long-term predictability There is no way around it: our industry requires a lot of electricity. Electricity costs represent up to 40% of the total primary production costs, and Europe has the highest electricity prices compared to main competitors due to the extra costs that arise from the Emissions Trading Scheme (ETS) and the greening of power generation systems. No aluminium smelter outside Europe is exposed to carbon costs in their electricity prices. That is why the ongoing overhaul of the EU’s State Aid Policy and the review of the guidelines on the compensation of the indirect costs of the ETS  are vital to avoid further plant closures in Europe and preserving the full aluminium value chain in Europe. We need a more comprehensive and less fragmented compensation system while ensuring long-term predictability. It will be equally critical to see similar developments in other parts of the world. Investing in the future Without innovation, we will not reach Europe’s ambitious climate goals. Aluminium  manufacturing and product development need to invest in reinforcing its contribution to more carbon-neutral and circular mobility, building and packaging sectors. However, investments in greenfield operations are challenging due to the lack of predictability related to regulation and access to affordable and green electricity. Large-scale breakthrough production technologies and recycling facilities require considerable upfront capital. Investments in dismantling, sorting, pre- and remelting technologies are also important to further close the loop. We call for a predictable framework and more favourable conditions to encourage investments in greenfield operations and to remove regulatory barriers that prevent scaling up of innovations and more recycling in Europe. We believe that EU funding and investment programmes must equally and fairly address key sectors without diverting massive amounts towards specific sectors such as plastics. Programmes should prioritise sectors that adopt a proactive industrial transformation vision for 2050, based on carbon neutrality, circularity and a positive contribution to society. Despite the challenges mentioned here, with the right conditions the European aluminium industry cannot only defend but even expand its share in the growth of the aluminium demand in Europe. Based on its enormous potential, our industry will be one of the frontrunners in Europe’s transition to a low carbon economy. So, my new year’s wish is that each one of Aluminium Leaderspeak’s readers becomes a proud and outspoken ambassador of our metal!