Rising Energy Costs Threaten Survival Of Europe’s Aluminium Industry

  • Date: 24/11/14
  • Christian Oliver, Financial Times

Europe’s aluminium output has slumped nearly 40 per cent since 2007. Across Europe, energy costs are threatening the survival of the industry

Aluminium workers at the Alunorf plant in the German city of Neuss aptly call one of their production lines “the grill”. Nearby, smelters in what is one of Europe’s leading industrial clusters are fired up to 960C. To keep all this running, the aluminium industry needs to be a voracious power consumer.

But across Europe, energy costs are threatening the survival of the industry: 11 out of 24 smelters in the EU have shut since 2007. And industry chiefs have no doubt about what is strangling their business, complaining that the EU’s environmental regulations are making electricity prices prohibitive.

The plant closures pose a fundamental question about whether the EU can continue to act as a global leader in the fight against climate change while simultaneously preserving competitiveness in heavy industry.

The EU also faces an ethical challenge about whether its green rules are counterproductive, pushing industries such as chemicals and metallurgy to developing nations where it is easier to pollute.

Europe’s aluminium output has slumped nearly 40 per cent since 2007, with Alcoa and Rio Tinto Alcan among the companies shutting large plants.

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