EU pressured to recognise aluminium as ‘strategic’ raw material

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EU countries led by France and Germany are pushing for the bloc to list aluminium as a “strategic” raw material, a move that would grant the industry faster permit procedures and wider access to financing.

Amendments to the EU’s proposed law on critical raw materials seen by the Financial Times would add to a priority list bauxite, alumina and aluminium — each processing stage of the metal used in everything from tin cans to solar panels. By listing them as “strategic”, the bloc would speed up permitting processes for aluminium smelters and bauxite miners.

The European Commission presented the draft law in March as part of the bloc’s efforts to make its economy greener and source more of the required raw materials in the EU, in an effort to avoid dependency on rivals such as China.

The request to add aluminium, alumina and bauxite comes as countries haggle over how to use legislation designed to power Europe’s green transition to support their national industries.

France, Germany, Greece and Slovenia are among those to support the inclusion, several diplomats said. A diplomat from a different country said the decision was “quintessentially EU”, “catering to industrial policy interests of the French and Germans”.

One diplomat supporting the addition said that the materials were important for the energy and digital transition, adding that the EU is “heavily dependent on imports of bauxite”.

Poland meanwhile has pushed for the inclusion of coking coal, used in steel production, a move that has not enjoyed the same level of support. One diplomat said the addition of aluminium could trigger further requests to expand the list.

Trade groups have also been lobbying for the inclusion of aluminium, saying that the metal is crucial for solar panels, wind turbines and grid technologies, and warning that China accounts for more than half of global supplies.

Prices for the metal shot higher in 2022 as supply struggled to keep up with demand following the war in Ukraine. Aluminium smelting is highly energy-intensive and a rise in gas prices forced smelters to shut down last year, causing European production to fall 50 per cent, according to European Aluminium, a trade group.

Should the addition be accepted, the industry will benefit from shortened permitting of 24 months for the extraction of bauxite and alumina, as well as 12 months for processing permits.

The strategic listing will mean that the EU will have to ramp up domestic extraction to 10 per cent of total consumption, and domestic processing to 40 per cent of consumption. Member states want to go to 50 per cent in domestic processing and raise recycling targets for strategic materials from 15 to 20 per cent, according to the text.

The commission projected that demand for other metals, such as lithium, would grow much faster, which is one of the reasons Brussels did not include aluminium in its legislative proposal.

“It was found that access to a secure and diversified source of aluminium was not as critical as for other technologies, such as, for example, lithium for [lithium-ion] batteries”, the commission said.

According to a Leuven university study funded by trade group Eurométaux, global aluminium demand will increase by 43 per cent from 2020 until 2050. Copper demand will grow by 51 per cent, while lithium demand will increase by 2,109 per cent.

The final list will be negotiated among member states, the commission and the European parliament — a process that has yet to start.