Make Kitco Your Homepage

Power costs could force metal producers from Europe - Eurometaux

Kitco News

LONDON, Sept 27 (Reuters) - Rising power prices could lead to metal producers moving operations away from Europe and undermine EU carbon-cutting plans, non-ferrous metals industry association Eurometaux has warned the European Commission.

Governments across Europe are coming under pressure to help curb soaring energy costs for companies and households caused by a global surge in wholesale gas prices, as economies emerge slowly from the coronavirus pandemic. read more

"Rising electricity prices have already led to curtailments and could lead to further relocation of our sector outside Europe if not addressed," said the letter from Eurometaux addressed to Kadri Simson, European Commissioner for Energy.

"We are also concerned that if electricity remains too expensive, it will disincentivise industrial electrification as a decarbonisation route, undermining the EU’s Green Deal objectives."

The European Union is aiming to reduce net greenhouse gas emissions by 55% from 1990 levels by 2030 - a step towards "net zero" emissions by 2050.

Non-ferrous metals such as aluminium, copper, nickel and silicon are more electricity-intensive to produce than any other material, said Eurometaux, whose members include Norsk Hydro (NHY.OL), Boliden (BOL.ST), Eramet (ERMT.PA) and Rio Tinto (RIO.L)(RIO.AX), Umicore (UMI.BR) and Nyrstar (NYR.BR).

"These metals will be required in higher volumes to supply key Green Deal value chains such as batteries, electric vehicles, wind turbines, solar panels and grid infrastructure."

The European Commission confirmed it had received the letter and said it would reply in due course.

Nyrstar said last week it has cut zinc production at its smelter in the Netherlands because of the rise in electricity prices in Europe.

Reporting by Pratima Desai; additional reporting by Kate Abnett; Editing by Pravin Char and Bernadette Baum
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.