Can the EU’s metal industry survive? European Aluminium warns of Chinese takeover

07 Oct 2022 --- The EU is taking insufficient action on the metal industry’s crisis, according to trade association European Aluminum. The comments come shortly after the European Commission (EC) enforced several measures to help metal producers, who say they are facing a “life or death” moment as electricity prices soar beyond affordable levels.

The association is also concerned that trouble in the market, which is seeing many metal producers close down, will further open the doors to countries like China – who can take over the European market.

Last month, a group of almost 50 metal associations and businesses wrote to the EC warning that if action is not taken, Europe will face “permanent deindustrialization” in its metal sector.

Kelly Roegies, head of communications for European Aluminium, tells PackagingInsights that since the letter was sent, the EC announced its Critical Raw Materials Act and the emergency energy measures.

“Both are a step in the right direction but are far from enough to help Europe’s aluminum value chain to continue delivering the European Green Deal, to provide jobs – to survive simply,” she says. “We’re extremely concerned about the survival of the aluminum industry in Europe and are worried that these proposals do not reflect the urgent need to support a critical industry like aluminum.”

The environmental footprint of the beverage can industry will continue to rise if Chinese produce takes over.PackagingInsights has contacted Metal Packaging Europe for comment.

Emergency measures
The emergency energy measures, which are aimed at lowering costs for industries as the Ukraine war is sending prices skyrocketing, will not be enough to prevent the closure of businesses long term, says Roegies.

This, in turn, will foster an environment in which China can flood the market with metal that is produced with a far higher environmental footprint than accepted within Europe.

“While European aluminum producers face a real existential threat, our non-European competitors, and China, in particular, ramp up their primary aluminum capacity. They are ready to replace European losses with their exports,” she says.

“It would be extremely unwise for Europe to become more dependent on imports for a material that is a critical component in virtually all low-carbon technologies.”

“Think about batteries, electric vehicles, wind turbines and solar panels, for example. We’re all experiencing the devastating consequences of our overdependence on Russian gas. Europe should not make that disastrous mistake again with raw materials,” she continues.

“We call on policymakers to create the right framework conditions that will help increase and preserve the capacity of Europe’s low-carbon primary aluminum production and world-class recycling sector. In the immediate term, this includes additional emergency measures to provide relief from the exorbitant gas prices.”

Environmental impact
Roegies says that if China is allowed to continue dominating the market, the environmental impact would be huge.

“The impact would be significant because their products are, on average, much more carbon intensive than aluminum produced in Europe. For example, China’s primary production process has a carbon footprint of 20 tons of CO2 per ton of aluminum compared to Europe’s (EU, EFTA, UK, Turkey) 6.8 tons of CO2 per ton of aluminum,” she explains.

While the current energy crisis has brought these issues to an apex, the problem of foreign metal being dumped on the European market has been ongoing for decades. Last year, European Aluminium warned that magnesium price rises caused by China would cause a catastrophe due to the country’s monopoly on resources.

By Louis Gore-Langton

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