The long-awaited proposal for a Critical Raw Materials Act was published by the European Commission in March, initiating discussions on an overdue industrial agenda focusing on the raw materials industry in response to the US Inflation Reduction Act. Will this Act deliver the much-needed solutions that the aluminium industry, and many others, have been eagerly waiting for? To answer the question, it’s important to contextualise the situation.
Giulia Forgnone is Senior Public Affairs Manager at European Aluminium.
In the past years, Europe’s dependence on third countries for raw material production and processing has grown significantly, often at the expense of overlooking the sustainability of imported products for short-term economic gain. On top of that, the ongoing conflict in Ukraine and the surge in skyrocketing energy prices have further aggravated the situation, particularly for energy-intensive industries like aluminium. However, aluminium is one of those raw materials industries that European cannot afford to lose, as it plays a vital role in various energy generation, transmission, and storage technologies, being a key element for the EU’s green transition. Studies show that such a transition alone will result in a 30% rise in demand for aluminium by 2040, primarily driven by the growth in electric vehicles, solar power, and electricity networks.
On top of that, aluminium is key for the circular economy, being a material that can be recycled over and over again with no downgrading of its quality and, when “Made in Europe”, has a carbon footprint that is three times lower than the global average. Substituting EU production capacity of aluminium with high-carbon footprint manufacturing from non-European countries is not only a huge loss and a distinct case of carbon leakage but also a contradiction with the objectives of the European Green Deal.
During a recent event organised by European Aluminium and Eurometaux, Maive Rute, Deputy Director General of DG Grow, also emphasised the need for domestic production of raw materials, such as aluminium, stressing the importance of minimising environmental impact compared to other regions across the globe.
European Aluminium has been advocating for a long-term and forward-looking raw materials strategy with a strong value chain focus for a long time. This strategy should aim at safeguarding Europe’s strategic independence while concurrently advancing its decarbonisation efforts. In this regard, the CRM Act presents a great opportunity to establish a secure and sustainable supply of raw materials in Europe, but the exclusion of aluminium from the list of strategic materials was a mistake. Not only is it undeniable that aluminium is strategic for the twin transition, but it is also clear that completely outsourcing its production to third countries will create future supply risks that could jeopardise the objectives of the Green Deal and create new dependencies that are not needed, especially in the currently unstable geopolitical scenario.
Now that the ball is in the Parliament and Council’s court, we call on co-legislators to reinstate aluminium to its rightful place on the strategic raw materials list and ensure that the dual challenge of reindustrialisation and decarbonisation in Europe swiftly transforms into a tangible opportunity.
Although the timeline is tight, we believe that through collaborative efforts between industry representatives and policymakers, we can successfully achieve this goal. Should this be the case, there is no doubt that the CRM Act could genuinely serve as the long-awaited solution we have all been hoping for.