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Competitiveness of the metals industries
This Communication identifies a number of factors which influence the competitiveness of the metals industries. This intrinsically highly energy-intensive sector is becoming less competitive owing to tighter restrictions in the EU than elsewhere in the world. The Commission is presenting a series of broad guidelines to encourage the metals industries and all the stakeholders concerned to focus on innovation and on supplying energy at competitive prices without neglecting environmental aspects.
Communication from the Commission to the Council and the European Parliament of 22 February 2008 on the competitiveness of the metals industries – A contribution to the EU's Growth and Jobs Strategy [COM(2008) 108 final – Not published in the Official Journal].
The metals industries are closely linked to the performance of major manufacturing sectors, such as car manufacturing, mechanical engineering, shipbuilding or aerospace. In 2005, the metals industries in the European Union (EU) generated a turnover of approximately 316 billion euros and employed 1.1 million people.
Despite a restructuring process aimed at reducing costs and improving labour productivity, and considerable innovation in the development of new applications, the metals industries are losing ground vis-à-vis global competition.
Competitiveness of the sector and dependence on raw materials
The competitiveness of the sector is being undermined by the substantial rise in gas and electricity prices. The production process of the metals industries is very energy-intensive, and energy generally accounts for more than 10 % and up to 37 % of production costs. As a significant source of CO2 emissions, the metals industries also have a high environmental cost.
The issue of access to non-energy mineral raw materials is crucial for this sector, which is highly dependent on imports of ores and concentrates from third countries. Recycling is reducing this dependence, however, by lowering energy consumption. The use of recycled scrap has increased significantly and today accounts for between 40 % and 60 % of EU metal production.
However, economic development in many emerging countries is increasing demand and contributing to the rising prices for metals and metals products and to unprecedented pressure on prices and the supply of raw materials.
Five major challenges for the future of the sector and its competitiveness
The identification of the various factors influencing the competitiveness of this sector has led the Commission to present an integrated approach on the basis of five future challenges facing the metals industries. This Communication takes account of the results of a public consultation organised in September 2006.
In cooperation with the parties concerned and third countries, the Commission will examine how to address the concerns regarding competitiveness in light of future actions to counter climate change and achieve environmental objectives. It will draw on the following measures:
- the Community's Emissions Trading Scheme in relation to the specific situation of highly energy-intensive industries and the risks of production being delocalised to countries where the emission limits are less strict (“carbon leakage”);
- Integrated Pollution Prevention and Control in order to reduce industrial emissions;
- the increased use of scrap metal as a secondary raw material to achieve cost-effectiveness;
- the application of the REACH Directive, and above all the development of technical guidance relating to the substances used in special preparations.
The public authorities are called upon to focus on initiatives concerning the availability of a competitively-priced energy supply, as underlined by:
- the action plan (2007-2009) “An energy policy for Europe”, aimed at creating a truly competitive internal gas and electricity market;
- the Competitiveness and Innovation Programme, which lays emphasis on best practices for energy savings in metallurgy.
The Commission wishes to improve the conditions of sustainable access to raw materials at European and international level. It will draw in particular on the results of a public consultation launched in 2008.
The Commission is encouraging the metals industries to keep research, development and innovation as the motors of competitiveness through the following actions:
- the long-term project for energy saving and “Ultra Low CO2 Steelmaking (ULCOS)”;
- the strategic research agenda developed by the competent European Technology Platforms, such as the Steel Technology Platform (ESTEP);
- improving the availability of skilled labour.
Lastly, the Commission intends to continue to use all existing instruments to address trade practices which are in violation of international trade agreements and will oppose the levying of export taxes on metals and raw materials by its trade partners.
This Communication is part of integrated industrial policy, which comprises horizontal and sectoral measures.
It is also in line with the Council conclusions of 14 and 15 May 2001 on a Strategy for integrating sustainable development into enterprise policy.