Global Aluminum Trade Groups Call on G7 to Limit Chinese Subsidies – Aluminum Insider
Last week, the Aluminum Association, European Aluminium, Aluminum Association of Canada and Japan Aluminum Association came together to publish Towards a fairer and cleaner aluminum trade, a briefing for policymakers that details the clear harm caused by government subsidies of aluminum production by the People’s Republic of China to the global economy and environment. The aluminum trade group consortium shared the briefing with trade officials from all G7 states, in particular Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
According to the briefing, data from the Organization for Economic Co-operation and Development (OECD) indicates that China’s share of the aluminum production market has risen from one-tenth at the turn of the century to almost 60%. today. The briefing says Chinese companies receive between 4 and 7% of their annual revenue through state subsidies, compared to a global average of 0.2% for major aluminum companies.
In addition to economic damage, the briefing says Chinese subsidies cause significant environmental damage, as subsidies tend to encourage aluminum operations that repel greenhouse gases instead of refining and smelting technology. more advanced which is noticeably cleaner. According to the briefing, about 88% of China’s aluminum capacity is coal-fired, which produces ten times more carbon dioxide than hydroelectric aluminum production.
Charles Johnson, president and CEO of the Aluminum Association, said non-Chinese companies will depend on a significant pushback against subsidies to grow and thrive in the global market.
“With continued demand growth and U.S. investment totaling $4 billion over the past decade, U.S. aluminum has a huge opportunity to thrive in the 2020s and beyond. But, reaching our full potential will require smart policy to tackle the massive public subsidies that distort global supply chains and slow industry’s push to decarbonize. Around the world, aluminum companies – not just state-owned companies – stand to benefit from demand that is expected to increase by 80% globally by 2050.”
Paul Voss, chief executive of European Aluminium, said China’s practices were hampering environmental progress on the continent.
“Unfair trading practices are eroding the enormous economic and social benefits that national value chains essential to delivering the European Green Deal bring and accelerating an alarming trend that Europe has faced in recent years: a growing reliance on imports from towards high carbon products which do not meet European sustainability standards.
Jean Simard, president and CEO of the Aluminum Association of Canada, said limiting Chinese subsidies is key to his country’s efforts to produce low-carbon aluminum.
“Canada produces responsibly with low CO2 primary metal is the result of massive multi-billion dollar modernization investments, operational efficiency and a stringent regulatory environment. As we move forward, to continue our decarbonization, a level playing field and clear rules of the game are needed to prevent subsidized carbon leakage from disrupting our North American value chain.
“In Japan, 2,400 companies operate along the aluminum value chain and support nearly 100,000 jobs,” concluded Japan Aluminum Association executive director Yasushi Noto. “Aluminum is far more useful to recycle than other materials and industry has a vital role in reducing the carbon footprint. To achieve carbon neutrality we need to prevent carbon leakage associated with distortion of the global aluminum value chain.