The European Union’s green ambitions could be “derailed” by the energy crisis. Metal companies warn against this.
If electricity becomes too expensive, it is less attractive to switch to electricity instead of coal for producers of, for example, aluminium. This could undermine the EU’s goal of being climate neutral by 2050.
Companies can also decide to settle in cheaper regions. For example, Eurometaux, which includes some of the largest metal producers such as Glencore, Rio Tinto and Norsk Hydro, sent a letter to the European Commission as rising energy prices are forcing companies to cut production.
They are also calling for further support for the sector, for example, through more regulation in the trading of mandatory emission allowances that they have to buy to emit greenhouse gases. This could possibly prevent the prices of these rights from rising too fast. Furthermore, state aid guidelines should be simpler.
Zinc producer Nyrstar said on Thursday that it is shutting down production at a major plant in the Netherlands during peak hours. This shows that the spikes in power prices also endanger metal supplies. For regional aluminium producers, electricity costs can be as high as 2000 euros per tonne, which is about 80 percent of the total price of the basic product, Eurometaux said.