As Europe’s already high energy prices continue to soar due to fallout of Russia’s invasion of Ukraine, and EU energy ministers are gearing up to meet this Friday for an emergency summit, the corporate leaders of Europe’s non-ferrous metals sector have sounded the alarm in an open letter warning that the industry that underpins the energy sector and green energy transition faces an “existential threat.”
The forty-seven undersigned CEOs of European metal firms call on European Commission President Ursula Von der Leyen, European Parliament president Roberta Metsola and the President of the European Council Charles Michel to take fast and comprehensive action.
Pointing to “unprecedented curtailments” the sector has been forced to make in the last year, the CEOs express concern that “the winter ahead could deliver a decisive blow to many of our operations, and we call on EU and Member State leaders to take emergency action to preserve their strategic electricity-intensive industries and prevent permanent job losses.”
While voicing their support for the European Union’s “drive to improve Europe’s strategic autonomy for its energy transition” and the willingness to make “the long-term investments needed,” CEOs emphasize the mineral and metal intensity of our green energy future and caution that “all metals production needs affordable and available electricity and gas, whether aluminium and zinc today or lithium and cobalt tomorrow.”
“We are deeply concerned that Europe faces a critical situation for the foreseeable future, with a perfect storm of sky-high electricity prices, no energy market liquidity due to insecure gas supplies, a continued nuclear and coal-phase out, and the remaining power sources being insufficient to cover market needs.
Europe cannot have a successful energy and raw materials strategy if its power and gas prices stay at today’s levels for a sustained period without relief. The long-term investment climate for all EU strategic metals operations and projects risks being decimated, and more closures will follow next year once companies are not protected by their 2022 hedging of the electricity price. Any further EU production loss will also increase global greenhouse gas emissions, due to replacement supply from more polluting regions.”
It is crucial, the CEOs say, that the European Union avoid adding “extra regulatory costs on suffering industries in this critical period,” and that action be swift and comprehensive.
The letter comes only days before Commission President Ursula Von der Leyen’s scheduled State of the European Union speech on September 14.
While looking at a number of short and medium term options, the European Union’s emphasis on the region needing “a new strategic thinking to defend the rules-based order,” which should start with ending dependency on Russian fossil fuels,” stands.
As Commission President Von der Leyen stated last month, “[o]ur increased need for other raw materials must not create new dependencies. We must diversify supply and build ties with reliable partners,” pointing to her planned trip to Canada this month, a country with which the EU set up a strategic partnership on raw materials in 2021.
From a U.S. perspective, Europe’s struggles and the non-ferrous metal sector CEOs’ letter should serve to underscore the urgency of now, and the need to support the industries fueling the sought-after push to net zero carbon emissions, because as Forbes contributor Wal van Lierop wrote last month, “without massive investments in base metals and key minerals, Europe and North America will fail to meet their carbon emission targets and face a new form of energy insecurity.”