The EU's new initiative aims to ensure the security and stability of the aluminum supply chain.

In early July, the European Union (EU) included aluminum in the catalog of minerals and metals covered by the "Critical Raw Materials Regulation" (CRMR). This move is primarily aimed at ensuring a stable supply of aluminum in the EU market, thereby promoting sustainable economic development within the EU.

Background of the EU's inclusion of aluminum in the critical minerals list:

Since 2020, the EU has intensified its research on the supply and demand situation of mineral resources. In a report published in 2022, aluminum was analyzed as a key category. The EU made the following assessments regarding the global aluminum industry:

On one hand, the geographical distribution of the global aluminum industry has undergone significant changes over the past 20 years, shifting towards regions with abundant bauxite or energy resources. New countries have become important producers of bauxite, such as China and Guinea. The global alumina industry has shifted from industrialized countries to nations with access to rich and affordable bauxite resources.

On the other hand, the EU believes that the aluminum industry is prone to interventions by producer governments, leading to market distortions. The EU referenced a 2019 report from the Organization for Economic Cooperation and Development (OECD) in its report, suggesting that government support is widespread in the aluminum industry chain, and non-market forces seem to explain part of the growth in aluminum industry capacity.

Furthermore, the EU predicts a significant increase in aluminum demand over the next decade. Between 2020 and 2030, global aluminum demand is expected to increase by 33.3 million tons, reaching a total of 119.5 million tons. 63% of this growth will be driven by Asian economies, with the transportation and power industries being the main drivers of aluminum demand growth. On the supply side, the EU believes that geopolitical conflicts are causing disruptions in the global aluminum market.

The EU's inclusion of aluminum in the list of critical raw materials:

 This is mainly aimed at ensuring the secure supply of aluminum.

As a core legislation to safeguard critical raw materials, the initial version of the EU's "Critical Raw Materials Regulation" did not include aluminum, which was met with widespread opposition from the industry. Shortly after the regulation's announcement, the list of critical raw materials was revised to include aluminum and its upstream components such as bauxite and alumina. This revision underscores Europe's emphasis on secure supply.

Firstly, aluminum is widely used in various economic and industrial sectors, making it a crucial basic metal. Its applications span across automotive, aerospace, electronics, and construction fields. In the automotive industry, aluminum alloys are used for body and component manufacturing, effectively reducing vehicle weight and improving fuel efficiency. In aerospace, aluminum is used in essential components like engines to achieve lightweight structures, enhanced fuel efficiency, and increased strength and durability to meet aviation safety and performance requirements. In the electronics industry, aluminum is used in components like heat sinks and electronic packaging. In construction, aluminum alloys are utilized for windows, door frames, and curtain walls, offering lightweight, corrosion resistance, and recyclability. These industries play a significant role in the EU's economy, driving substantial demand for aluminum products.

Secondly, the vulnerability of the EU's aluminum supply chain has been evident in recent years. The EU has a high dependency on aluminum, but its domestic aluminum resource supply is limited. Aluminum production in European countries primarily relies on recycling and imports. The EU lacks sufficient domestic bauxite resources, with some deposits being depleted or decreasing in output. From 2016 to 2020, the EU mainly imported bauxite from Guinea (70%), Brazil (14%), and Sierra Leone (10%); concerning primary aluminum imports, an average of 33% came from Russia. Other major supplying countries included Mozambique (17%) and Iceland (14%). Due to geopolitical conflicts and other factors, the EU's aluminum supply chain vulnerability has increased. Any interruptions in supply or price increases could have significant impacts on the EU's economy and industries, necessitating measures to address these concerns.

Thirdly, aluminum is connected to the EU's sustainable development goals. EU member states place a strong emphasis on sustainable development and environmental protection. However, the production and processing of aluminum have environmental impacts. The extraction and refining processes require substantial energy and water resources and result in significant greenhouse gas emissions. Additionally, harmful substances and waste are generated during the aluminum production process. The EU needs to promote the development of a sustainable aluminum industry, encouraging the use of energy-saving and resource-efficient production technologies and processes to minimize adverse environmental effects.

This EU initiative will have positive impacts on resource supply security and industrial development:

Overall, the EU's inclusion of aluminum in the "Critical Raw Materials Regulation" will elevate aluminum's position within Europe's critical raw materials strategy. It will garner increased attention and support for the aluminum industry chain, enhancing the EU's competitiveness in the aluminum sector and ensuring economic security and sustainable development.

Firstly, it ensures stable supply. Aluminum is a critical raw material for the EU economy and industries. Including aluminum in the "Critical Raw Materials Regulation" helps secure a reliable supply chain, reducing the risk of supply disruptions and ensuring economic stability within the EU. This move will also encourage the development of the European aluminum industry, promoting innovation and technological advancements, and enhancing the competitiveness of European enterprises in the global market.

Secondly, it promotes innovation and technological advancement. In response to challenges, European companies will continually innovate and develop more competitive aluminum products and production technologies. This will contribute to boosting the innovation and technological capabilities of EU companies in fields such as materials science and engineering technology, fostering economic structural adjustments and industrial upgrades.