European Aluminum Industry Calls for Urgent Support Amid High Energy Costs
The European aluminum industry needs urgent support to remain competitive in the face of high energy and raw material prices, according to Paul Voss, CEO of the European Aluminium Association, in an interview with S&P Global Commodity Insights.
Voss highlighted that European aluminum producers face significantly higher electricity costs compared to their counterparts in other countries. The rise in tariffs across the EU is largely attributed to anti-Russian sanctions and the rejection of Russian gas, which have driven energy prices up considerably. In September 2024, the average level of month-ahead contracts at the Dutch TTF hub was nearly three times higher than in the same month in 2019, illustrating the volatility of the European energy market in recent years.
The introduction of carbon tariffs in the EU from 2026 will also pose a challenge for the European aluminum industry, Voss noted. These tariffs will increase the cost of imported metal by adding the cost of carbon dioxide emissions, while European companies will continue to face high production costs. This, he warned, could ultimately render European aluminum producers uncompetitive on a global scale.
According to the International Aluminium Institute, primary aluminum production in Western and Central Europe fell by 28.6% between 2010 and 2023, reaching 2.71 million tonnes. In contrast, production in Russia and Eastern Europe declined by only 5.6% over the same period, totaling 4.02 million tonnes.
Voss believes that providing European aluminum companies with subsidies for electricity is the only way to reduce production costs and improve competitiveness. Without such support, he cautioned, the European aluminum industry could face further decline.
