STRATEGIC RAW MATERIALS: CONSERVA (FACE), CBAM HARMS COMPANIES THAT USE ALUMINUM, EU HAS TO RECONSIDER MEASURES
“IT IS A COUNTERPRODUCTIVE TOOL, BETTER THE INFLATION REDUCTION ACT (IRA) OF THE UNITED STATES”
15 May 2023. “The Carbon Border Adjustment Mechanism (CBAM) launched by the European Union represents in its current formulation a choice that harms companies that use aluminium as a raw material, increasing costs, decreasing the competitiveness of EU manufacturing and leading to higher prices for end consumers. A choice that puts at risk the supply of an essential material for many industries, such as automotive and transportation in general, construction, solar, packaging products, and electrical engineering.” This was stated by Mario Conserva, Secretary General of FACE (The Federation of Aluminium Consumers in Europe).
“Unlike the CBAM approach,” Conserva continued, “the Inflation Reduction Act (IRA) introduced in the United States for similar eco-sustainability purposes, represents a simple and very effective approach to promoting environmental ambition, providing for the adoption of measures that foster the reduction of greenhouse gas emissions and that support green technologies, low carbon products and renewable energy, without creating distortions in the market as it is based on attractiveness power”.
“The IRA also focuses on reducing inflation, which benefits both consumers and businesses, and promotes innovation and technological development by offering incentives to companies that invest in sustainable solutions. Such massive, clear and pragmatic incentives stimulate the creation of new jobs in the renewable energy industry, green manufacturing and other related sectors.”
“On the contrary,” Conserva explained, “the introduction of the CBAM, which amounts to an additional tax on aluminium, in addition to the economically absurd EU import tariff on primary metal, whose cancellation we have been calling for years, will lead to a loss of competitiveness for companies processing and working aluminium and its alloys, and to a higher cost for finished products.”
FACE estimates that the combined overcosts harming downstream companies from the import tariff on primary aluminium and the CBAM will be in the range 5-7 billion euros annually. Aluminium is a low margin industry, and the European value chain is essentially made of SMEs. The combination of import tariffs in an import-dependent market ( at 80%! ) and of CBAM represents a European economic suicide in the current multicrisis and context of fierce and often unfair international competition.
While the United States is promoting reindustrialization and decarbonization, with the powerful tool of the IRA, the European Union with outdated import tariffs on raw metal imports and with the burden and bureaucracy of the CBAM is leading us to deindustrialization and neutralisation of our decarbonisation efforts by eroding the competitiveness of our industry in favour of international competitors that have an average carbon footprint 4-5 times higher than European manufacturers.”
For all these reasons,” FACE’s Secretary General concluded, “we call on the EU to review its CBAM and aluminium tariff policies and instead work to protect our sustainable competitiveness”.
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