The world of aluminum trade is at a pivotal juncture, with sustainability and innovation at the forefront of international discussions. The Global Arrangement on Sustainable Steel and Aluminium (GASSA) has become a cornerstone of these dialogues, setting the stage for an industry undergoing transformative change.
In October 2021, the European Union and the United States initiated conversations that would steer the aluminum industry towards a more sustainable and equitable future. This partnership, aimed at combating global overcapacity and the impending climate crisis, signaled a new era of collaboration.
The journey to this point can be traced back to 2018, when then-President Donald Trump imposed significant tariffs on EU steel and aluminum. This move disrupted the aluminum trade landscape, prompting negotiations for a solution that addressed these imbalances while promoting environmental responsibility.
The heart of these talks lies in a shared ambition: to foster an aluminum sector that aligns with the green transition. Negotiators are grappling with complex challenges, balancing the delicate intricacies of international trade with the urgent need to reduce the industry’s carbon footprint.
A critical component of these negotiations is the Tariff Rate Quota (TRQ) system. By establishing historical-based volumes for EU aluminum entering the US market sans the heavy tariffs, the TRQ system is more than a trade mechanism—it’s a potential catalyst for climate change mitigation. Ensuring it remains in place is crucial, not only to manage excess capacity but also to indirectly promote the production of green aluminum.
However, the road to consensus is fraught with hurdles. The surprising collapse of talks in late October has cast uncertainty on the path forward. Despite the apparent alignment of values and objectives between the EU and the US, the details prove to be the devil in the mix. A deal on green steel, touted as the low-hanging fruit of industrial collaboration, remains elusive, raising questions about the feasibility of more complex agreements.
The stalemate, however, does not signify an end but rather a call to action. Product- and facility-level Environmental Product Declarations (EPDs) have been identified as viable starting points. By establishing steel emissions intensity targets for both primary and secondary aluminum, there is an opportunity to ensure that all aspects of production are moving towards the essential progress needed for a sustainable future.
As negotiations continue through the end of the year, albeit with uncertain steps, the industry must brace for a partial agreement at best. While the vital carbon component of the discussions may not see resolution, the focus on the TRQ system remains a beacon of hope.
As we look ahead, the aluminum industry stands at a crossroads. Staying abreast of the developments in green aluminum production is not just recommended but necessary for those invested in the future of this vital sector.
