Although the world’s eyes are already fixed on COP28 taking place in Dubai in two weeks, Brussels hosts a vital gathering this week. As this year’s EU Raw Materials Week will emphasise, the green transition will only be possible if the EU establishes the conditions to secure the raw materials it needs for net-zero technologies. Copper is one of these key raw materials.
Paving the way for a secure, locally sourced green transition
In new proposals under the Green Deal Industrial Plan, the EU has taken encouraging steps to respond to new global challenges such as the US Inflation Reduction Act and China’s dominant position in numerous critical raw material supply chains. Importantly, the EU sends a much-needed political signal that secure access to raw materials is fundamental for the green transition to materialise.
There is indeed potential to increase the extraction, processing, and recycling of strategic raw materials capacity in the EU, and this potential can be exploited using high environmental and technical standards that the EU legislative landscape already imposes. However, this potential is currently hard to unlock due to long delays in permitting processes, high electricity prices and the complex, burdensome regulatory environment in the EU.
The Critical Raw Materials Act can help by streamlining permitting processes. This is vital to accessing the metals ore required to meet the Plan’s strategic goals as well as the EU’s existing net-zero goals. The streamlined permitting provisions now need strong support from co-legislators and, crucially, from member states to ensure prompt implementation.
These new measures, combined with the Net-Zero Industry Act, present an unmissable opportunity to enhance the resilience and competitiveness of net-zero technology value chains in the EU and can help pave the way for a secure, locally sourced green transition.
Empowering a globally competitive EU industry
However, faster permitting alone will not suffice. European copper producers must be competitive to be able to invest in the expansion of production capacity while also pursuing the decarbonisation of their production processes, as illustrated in Copper—The Pathway to Net Zero (the industry decarbonisation roadmap published in March this year).
Copper production is electricity-intensive, and the use of electricity must increase further to enable decarbonisation. Yet the EU’s electricity prices far exceed those of many other copper-producing regions. Since copper prices are defined on global commodity markets, EU producers cannot pass on higher production costs to customers. The EU therefore must find a way to ensure internationally competitive prices for industrial electricity supply, to maintain the production of strategic raw materials like copper in the EU and to support decarbonisation through electrification.
We therefore urge co-legislators revising the EU Electricity Market Design to support the parliamentary amendments which allow member states to extend support measures to energy-intensive industries during future energy crises. However, much bolder action is needed by the next European Commission to bring consumer prices down, like the set-up of risk sharing mechanisms between generators and consumers – or via a public entity like the European Investment Bank, to manage the risks that stem from the need to match the variable nature of renewable generation with the stable consumption profile of a copper producer. Such mechanisms should be in place until such time that electricity prices are brought down through abundant renewables capacity combined with flexibility sources.
Closing the loop for metals of the green transition
Finally, the EU regulatory environment must facilitate recycling strategic raw materials, from copper to nickel to lithium.
Currently, at least 50% of European copper demand is already met by recycled material. The recycling of scrap from end-of-life products fulfils 27% of copper demand, and the recycling of fabrication scrap fulfils another 28%. However, there is still potential to further increase the EU’s recycling rates of copper. This requires measures to increase the end-of-life collection rate of copper-containing products, and to facilitate investments in recycling capacity.
Copper is unparalleled in its degree of durability and versality, meaning that its properties do not degrade over time. Indefinitely recyclable, copper symbolises circularity, thanks to elaborate industrial processes that allow to extract pure copper from secondary sources. Yet recycling, while an important source of copper, cannot meet demand on its own. Even if 100% of copper products were recycled at the end of their life, that would only reduce the demand for copper from primary sources by 26% by 2050. Global demand can only be fully met through a combination of copper mining and recycling.
The Pathway to Net Zero is powered by copper
Since it is a key input for most net-zero technologies, the EU now recognises copper as a “strategic raw material” in the recent Critical Raw Materials Act. Given its essential role in fulfilling the EU’s 2050 objective of climate neutrality, copper has never been more important.
In Europe, a 35% increase of copper demand is expected by 2050. There are enough copper reserves to meet this need and significant deposits have already been identified for additional ore extraction in the EU. Increased copper recycling can also contribute to meeting this demand. Members of the International Copper Association (ICA) of which the European Copper Institute is the EU branch, representing many of the world’s largest copper miners and mid-stream smelters and refiners, are committed to increasing production in a sustainable manner. That is why ICA members have committed to bringing the Scope 1 and Scope 2 GHG emissions of their copper production to net zero by 2050. Described in detail in Copper—The Pathway to Net Zero, this commitment extends to actively partnering with the copper value chain to minimise Scope 3 emissions over the same timeframe.
There is no green transition without the vital contribution of copper and other strategic raw materials. To foster a green industry in Europe and achieve climate neutrality, the EU must provide a supportive operating environment for these strategic raw material industries that incentivises investing in Europe. The next European Commission must take decisive action to support the competitiveness of strategic industries while accelerating electrification and the deployment of renewables and energy efficiency. The EU’s strategic autonomy in raw materials for net-zero technologies must be at the heart of the Commission’s next mandate.