MINEX Forum

Tag: EU Carbon Border Adjustment Mechanism (CBAM)

  • Miners see value in EU focus on ESG but face red tape hurdles

    Miners see value in EU focus on ESG but face red tape hurdles

    Miners welcome the positive impact of Europe’s focus on environment, social and governance issues (ESG) although the process can be riddled with red tape causing delays in achieving their green ambitions, company executives said.

    Mining is crucial for the supply of critical raw materials including copper and aluminium needed for electric vehicles and renewable technologies such as solar power, but miners are also responsible for up to 7% of greenhouse-gas (GHG) global emissions as most in the sector race to hit net zero by 2050.

    Compliance with ESG standards are increasingly important to keep commitments from institutional investors such as pension funds and insurance firms and for bank loans.

    Christel Bories, CEO at miner Eramet told Reuters documentation proving the company’s ESG credentials for bank loans ran into thousands of pages and that the whole process from start to finish could take up to 18 months.

    “We have no problem supplying the evidence… but it does slow down the project,” Bories said.

    One initiative welcomed by metal producers is the EU’s Carbon Border Adjustment Mechanism (CBAM). From October 1, EU firms have to report the GHG embedded during production of imported volumes of some goods including iron and steel, aluminium and electricity.

    CO2 emission charges will not be imposed until 2026.

    “We like it because it gives us a level playing field with other countries,” said Boliden CEO Mikael Staffas, but he added there were issues.

    “One example is if you import copper, turn it into tube and export it, you should get some credit back. This will be an administrative nightmare,” Staffas said referring to the paperwork that would be required.

    Investors want to see mining companies account for and report their emissions consistently and mine in a socially responsible way.

    “There is a concern that there has been a proliferation (of standards) but let’s not forget a lot of these standards have evolved because things in the sector have not been so good in the past,” said Adam Matthews, chief responsible investment officer for the Church of England Pensions Board, which invests in mining companies.

    Boliden’s Staffas cited zero fatalities due to focus on ESG compared with roughly two per annum at some of the largest miners. “We are 15 years fatality free.”

    EU lawmakers are also pushing for far greater recycling of waste in a new law to ensure the bloc has raw materials such as lithium, nickel and cobalt required for its green transition, and traditional recycling companies and newcomers are investing in capacity to produce battery materials.

    Eramet’s joint venture with water company Suez to be located in France’s Dunkirk region is one example.

    The partners are aiming to build a plant to dismantle electric vehicle batteries, followed by a second unit to separate and refine metals for reuse with a low carbon hydrometallurgy process.

  • Poland files legal complaints against “authoritarian” EU climate policies

    Poland files legal complaints against “authoritarian” EU climate policies

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    The Polish government has submitted four complaints against EU climate policies, calling them “authoritarian” and pledging that it “will not allow Brussels’ diktat”.

    [/vc_column_text][/vc_column_inner][/vc_row_inner][vc_empty_space][vc_separator][vc_empty_space height=”10px”][vc_row_inner][vc_column_inner width=”2/3″][widget-SocialWidget][/vc_column_inner][vc_column_inner width=”1/3″][link url=”https://notesfrompoland.com/2023/07/18/poland-files-legal-complaints-against-authoritarian-eu-climate-policies/” content_text=”News source”][/vc_column_inner][/vc_row_inner][vc_empty_space][vc_column_text]The Polish government has submitted four complaints against EU climate policies, calling them “authoritarian” and pledging that it “will not allow Brussels’ diktat”.

    Three new cases filed to the Court of Justice of the European Union (CJEU) relate to a ban on the registration of new internal combustion vehicles after 2035, an increase in the EU’s greenhouse gas reduction target, and a reduction of free emission allowances under the EU Emissions Trading System (ETS).

    They follow another complaint filed last week against EU rules on land use, land use change and forestry (LULUCF), which Poland says infringes the competences of member states.

    “Does the [European] Union want to decide in an authoritarian manner what kind of vehicles Poles will drive and whether energy prices will rise in Poland?” tweeted climate minister Anna Moskwa on Monday. “The Polish government will not allow Brussels’ diktat.”

    This morning, the minister added in an interview with Polskie Radio that the government would also file a fifth complaint this week concerning 35,000 tonnes of rubbish that it says has illegally entered the country from Germany.

     

    Poland’s current national-conservative government has regularly criticised the EU’s climate and environmental policies. Ruling party leader Jarosław Kaczyński has called them “madness and theories without evidence” and “green communism”.

    “At every EU council, we have been against and voted as a government against every single document in the Fit for 55 package,” said Moskwa, referring to the EU’s programme to reduce emissions by at least 55% by 2030.

    “It is no secret that we were against the whole package, we are against increasing climate ambition and the way [these efforts] are carried and forced [upon member countries],” added the minister.

     

    A recent EU-funded study found Poland to be the bloc’s least green country. It still relies on coal to produce around 70% of its electricity, by far the highest figure in the EU. Poland is Europe’s second-largest producer of brown coal after Germany and the largest producer of hard coal.

    In March, Poland was the only member state to oppose the introduction of a ban on the sale of new petrol and diesel cars from 2035. In an interview today, Moskwa argued that unanimity should have been required for this decision as its impact is heavily dependent on member countries’ energy mix.

    “In our case, [banning combustion engines] is absolutely contrary to climate policy, because it will lead to an increase in coal consumption in the short term if we want to increase electricity production [to power electric vehicles],” she said.

    Asked about the other complaints, Moskwa said Poland was challenging most of them on the same grounds as the ban on the sale of combustion cars.

    “The argument in most of these complaints is the same, mainly concerning the legal basis and unanimity, the impact on the energy mix,” she said.

    One of the EU policies opposed by Poland is changes to ETS stipulating that sectors already covered by the system will be obliged to reduce their greenhouse gas emissions by 62% by 2030 compared to 2005 levels. The reform also envisages a gradual phase-out of free emission allowances between 2026 and 2034.

    Another regulation concerns the provisions on the new EU Carbon Border Adjustment Mechanism (CBAM), which will cover commodities such as iron, steel, cement, aluminium, fertilisers, electricity and hydrogen.

    Importers of these commodities will have to pay the difference between the emission fee in the country of production and the price of emission allowances in the EU ETS. CBAM will be phased in between 2026 and 2034, as free emission allowances in the ETS are phased out.

    Moskwa argues that Poland is pursuing a “very consistent energy transition” focused on creating incentives rather than restrictions. She cited government subsidies for clean energy sources such as the “My Electricity” and “Clean Air” programmes, which have led to a boom in solar micro-installations and heat pumps.

    Data from the European Environment Agency published last month showed that Poland recorded the EU’s largest overall fall in emissions in 2022. However, in proportional terms, Poland’s decline was, though above the EU average, not among the highest in the bloc.

    Main image credit: ETIENNE ANSOTTE | EUROPEAN COMMISSION

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