(EM)POWERING EU – Accessing Green and Affordable Energy ?

Hi there! Welcome to European Aluminium’s newsletter, your window into the world of aluminium as we prepare for the 2024 EU institutional renewal. By shedding light on key industry developments and an in-depth exploration of our top 5 policy priorities for the upcoming policy cycle, our goal is to provide a more comprehensive perspective on how we can ensure a green transition made in Europe.

As Europe confronts the twin challenges of decarbonisation and industrial competitiveness, electrification and affordable green energy have become the cornerstone of its future. For industries like aluminium, which are crucial to Europe’s economic fabric yet deeply reliant on energy, the path to sustainability lies in balancing decarbonisation with industrial resilience. The upcoming legislative cycle must prioritise these issues, ensuring that the energy transition is not only green but also affordable for Europe’s industries. Both the Draghi report on Competitiveness and the Antwerp Dialogues underscore this urgency, calling for policies that place electrification and green energy at the heart of the EU’s industrial strategy.

Antwerp’s Power Pulse

On 18 June, the first Antwerp Dialogue we organised together with Cefic and Eurelectric set the stage for a crucial series of high-level discussions on industrial electrification—an essential component of Europe's journey towards decarbonisation. These dialogues are a collaborative effort to tackle the pressing challenges faced by Europe’s energy-intensive industries, such as the aluminium sector.

Electricity prices in Europe are currently too high, posing a significant barrier to industrial electrification. Achieving widespread electrification requires the power sector to provide cost-competitive electricity to industries. If prices do not fall to more sustainable levels, the likely consequence will be demand destruction, which could lead to lower power prices. Such an outcome would also destroy the need and business case for more renewable power. Power producers need customers to reduce price risk and built-in demand for power!

The recent video featuring Marco Mensink from Cefic and our Paul Voss dives into the pressing need for industrial electrification and the role of flexibility in energy systems. They discuss how collaboration between industry leaders and policymakers is crucial for overcoming challenges like high energy costs, improving grid infrastructure, and fostering long-term energy solutions such as Power Purchase Agreements (PPAs). With rising energy costs and evolving production capacities, particularly in energy-intensive sectors, the future of European industry presents both challenges and opportunities for growth. The Antwerp Declaration catalysed these discussions, emphasising the need for flexibility solutions, long-term energy contracts like Power Purchase Agreements (PPAs), and innovative financing for renewable and low-carbon technologies. Key barriers to signing PPAs in our industry are the shaping costs associated with matching baseload demand with supply. The Green Pool scheme (CEEAG) under discussion in Greece could be one solution to address such a problem.

The first deep dive session held on 12 September examined how flexibility mechanisms, electricity markets, and carbon market integration can boost industrial electrification. In industry, flexibility primarily involves short-term reductions in energy consumption. However, the kind of flexibility envisioned by the power sector would require substantial investments from consumers, significantly reduce operating hours (which is out of the question with highly CAPEX-intensive assets), and fundamentally alter industry’s business. Therefore, such measures should remain voluntary and tailored to specific sectors.

Optimising energy supply and demand through advanced grids and storage solutions is vital for both competitiveness and meeting the EU’s ambitious climate goals. Yet, significant questions remain: How can Europe navigate these challenges, and how can Member States collaborate effectively?

Looking ahead, the next deep dive will address critical issues such as taxes, levies, and grid infrastructure needs. The Antwerp Dialogues mark an important moment where industry and policy intersect, driving Europe towards a future of electrification while safeguarding industrial competitiveness.

To find out more, watch the video with Marco and Paul below ??

Draghi’s Vision for EU

Released just recently, the report by Mario Draghi on “The Future of European Competitiveness” could(n’t) have come at a better time. It lays out a comprehensive strategy to revitalise EU industry, offering a clear path forward in the face of rising global competition and evolving energy dynamics.

The report stresses the need to lower energy prices and transfer the benefits of decarbonisation to consumers, including industrial giants like aluminium producers. For an industry navigating high energy costs and global competition—especially from non-market economies like China—this report offers a valuable opportunity for revitalisation and strategic growth. As Draghi’s analysis highlights, it’s time for Europe to protect its strategic industries, like aluminium, and level the playing field with well-calibrated trade measures!

Beyond energy and trade, the report touches on innovation, decarbonisation, and reducing Europe’s dependency on external raw materials. It envisions a future where Europe’s industrial capability is once again a global benchmark—by closing the innovation gap, accelerating clean energy solutions, and ramping up domestic production of strategic resources. This ‘joint decarbonisation and competitiveness plan’ is a win-win – sustainable, green growth and strong industry.

The report also presents actionable steps, like reforming the EU budget, building a genuine Capital Markets Union (CMU), and boosting private and public investments. These are essential to make sure Europe’s industries don’t just survive the energy transition—they thrive in it. With the Clean Industrial Deal set to emerge from this vision within the first 100 days of the new European Commission , the blueprint for Europe’s industrial future is taking shape, and it’s time for policymakers and industries alike to step up ??

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Jump into the conversation and drop your thoughts on our manifesto and policy goals. Your insights and feedback are needed as we work towards a stronger, more resilient aluminium industry in Europe. Connect with us on LinkedIn, X and our website and stay updated on the latest developments! ??

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