December 22, 2021 – The European Steel Producers Association EUROFER and its spokesman Axel Eggert complain about too few subsidies due to increased ETS costs. Chinese aluminum imports are up 300% in 2021. And aluminum prices on SHFE and LME are rising again significantly.
Chinese aluminum imports rise more than 300%
Chinese primary aluminum imports increased by more than 300% year-on-year in 2021. This is according to data from the General Administration of Customs for November 2021. The rising trend also continued in November imports. These increased about 64% from the previous month. This data indicates that China is relying more and more on aluminum imports from abroad to meet domestic demand.
Energy costs up, aluminum prices rise
After energy prices have risen again in recent days due to cold weather conditions and the scarce availability of energy sources (e.g. natural gas), aluminum prices on the LME and SHFE have also responded. For SHFE aluminum went up today on average by 2.56%. The aluminum values on the LME are currently up 1.43% and are close to $ 2,800 per ton.
EUROFER complains about too few subsidies
While the European steel producers state in their own studies that they will not have an industrially mature technology for CO2 neutral steel production before 2030, their spokesman, Axel Eggert of the EUROFER association, complains in a recent press release about the expiry of the free allocation of European ETS certificates by 2030.
14 billion euros in ETS subsidies per year
What is exciting here is that EUROFER’s calculations seem to assume CO2 emissions of around 1 to 1.2 tons of CO2 per ton of steel. Otherwise, the 14 billion euros that would be lost to the steel industry in subsidies can hardly be explained. Currently, the CO2 emissions per ton of EU steel are around 1.8 tons.
Unfortunately, the EUROFER press release does not mention which calculation basis Mr. Eggert used. Large, incomprehensible figures are more effective.
Steel association advertises with big numbers
The EU steel industry has promised 25 billion euros in investments in green technologies, regarding Eurofer. Primarily in those that would have to be shut down again by 2030 in order to achieve the CO2 targets. The European Union and also the member states, above all Germany, have already pledged subsidies. For the thyssenkrupp plant in Duisburg alone, the new German Chancellor Olaf Scholz wants to spend 8 billion euros in taxpayers’ money on subsidies – so that a reduction of just 30% can be achieved with technologies that will already be obsolete in 2030. In total, the German steel industry would like to have 500 billion euros in subsidies for the sustainable transition to green steel.
Industrial deployment for new steel technologies only from 2050?
It is also interesting to note that the industry’s own studies state that investment in full-fledged industrial facilities is not due until Technology Readiness Level (TLR) 9. And, funnily enough, these are not planned at all before 2050. There is, of course, a path to where individual technologies could reach TLR 9 before then – starting around 2030. But why implement before 2050 when you could still take away free ETS allowances while being protected by CBAM?
But Axel, sure we understand that you prefer not to say that. And that your industry would like to be paid generously with tax money for technologies and production facilities that will not be ready for production before 2050. Fair enough, it is your job to overdraw your positions. Better to add a paid PR article.
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