Aluminium sector illustrates close link between trade and climate policy

(EurActiv, 18 Sep 2019) New production methods and uses are making aluminium a material of choice for European policymakers looking to decarbonise the economy. But a flood of cheap carbon-intensive aluminium from China could complicate these efforts.

An energy-intensive industry, the aluminium sector has been subject to the EU’s Emissions Trading Scheme (ETS), which forces big polluters in Europe to buy credits on the EU carbon market.

At the same time, aluminium has attracted policymakers’ attention for its decarbonisation potential – both as a lightweight material for sectors like the automotive industry and  because new production processes have helped reduce emissions from aluminium plants.

But just as these efforts are starting to pay off, a new obstacle has come up: the US-China trade war. New American tariffs on aluminium imports – which affect both Chinese and European producers – are pushing all the excess Chinese production into Europe, flooding the market.

China is now the world’s biggest producer of aluminium. But its production is up to three times more carbon-intensive than aluminium made in Europe, mainly because the electricity taken from the grid in China is largely generated from coal.

As the European Commission readies its assessment of just how much the US tariffs and Chinese imports are impacting the EU market, the industry is warning that the end result could hurt Europe’s efforts to decarbonise.

External link

EurActiv, 18 Sep 2019: Aluminium sector illustrates close link between trade and climate policy