5 Points on Copper, Carbon Pricing and EU Competitiveness

Dr Katia Lacasse of the European Copper Institute has defined five points concerning copper, carbon pricing and future competitiveness in the European Union ahead of tomorrow’s Eurometaux-led meeting that asks: how can we really enable Europe’s low-carbon transition?

Copper is a key contributor to Europe’s low-carbon future

Copper is the best non-precious conductor of heat and electricity, meaning things that contain copper can operate more efficiently. This makes copper a key material for Europe’s sustainable future. It is already an essential ingredient in renewable energy solutions—such as solar, wind, tidal, hydro, biomass and geothermal—and in most innovative technologies, including aquaculture and space exploration. Its role in electro mobility and energy efficiency is also growing. Based on this, McKinsey has estimated a 43% potential increase in copper demand by 2035 vs. today’s demand of 22 million tonnes.

The copper-producing industry is committed to lowering its environmental footprint

The European copper industry has reduced its own unit energy consumption by 60% since 1990 thanks to substantial efforts to improve the energy efficiency of production, waste heat recovery and recycling processes. In the past five years, water recycling rates have also increased by nearly 70%. European copper producers are amongst the most resource and energy efficient metal producers in the world and are continuously working to make further improvements.

Copper is an excellent example of a truly circular material

Recycling copper is a very efficient way of reintroducing a valuable material back into the economy. It is 100% recyclable without loss of properties, so it can be used again and again. Even better: it can be recycled into diverse objects after everyday products such as cables and wires reach the end of their lives. Globally, 8.5 megatonnes of copper are recycled every year, and using this recycled material requires up to 85% less energy than primary production. Around the world, it saves 100 million MWh of electrical energy and 40 million tonnes of CO2 annually.

Copper needs to stay competitive to unleash its potential

The upfront energy cost of producing copper is significant (though less so than competing materials) but once produced, the material can be recycled repeatedly. This means that, in the long run, the initial energy investments are vastly recouped, though the process undertaken by the EU smelters to recover and recycle more end-of-life complex copper scrap is also carbon-intensive. This means that increasing the recycling rate will lead to more CO2 emissions, and to higher cost under the EU Emissions Trading System (ETS).

At the same time, there is one global price for copper. International competitors in China and other emerging economies do not bear the same environmental costs as those based in the EU, even though all producers compete in the same marketplace under the same globally-set prices. This makes it difficult for the European copper industry to remain competitive and will lead to more EU copper imports. A level playing field is required to prevent this.

To ensure copper stays competitive we need the right market conditions

Non-ferrous metals, including copper, are a key piece in Europe’s low-carbon puzzle going forward, so we need to ensure appropriate market conditions are in place that reward high industrial performers and incentivise the innovative use of—for example—surplus heat and production by-products (e.g. final slags) as well as increased recycling rates.

For the copper industry, tangibly, that means granting carbon leakage status post-2020 and full compensation for direct and indirect CO2 and resource efficiency-related costs.

About ECI

The European Copper Institute (ECI)—founded in 1996 and based in Brussels—coordinates a team of 38 professionals based in 10 offices across Europe, and works closely with its copper industry members on regulatory matters and market development programs. ECI is part of the Copper Alliance, which brings together the global copper industry to develop and defend markets for copper, and to make a positive contribution to society’s sustainable development goals. Read more about ECI on www.copperalliance.eu.