Europe s metals ecosystem the canary in the coal mine for energyintensive industries The nonferrous metals industry s frontrunner status means it will be the frst in line to face several major regulatory challenges from Europe s climate transition How it copes will be an early indicator of the adequacy of EU industrial policies to support energyin tensive industries through the transition In particular the nonferrous metals industry s electrointensity mak es it particularly sus ceptible to the potential impacts of a decarbonising power system i e higher electricity prices and lower grid stability The industry s use of electricity per tonne of product as a percentage of total production costs is currently higher than any other energyinten sive sector The industry is therefore already signifcantly impacted by indirect carbon costs from the Emissions T rading S ystem ET S passed on by power producers to metals producers With a rising ET S price e xpected in coming years the impact of indirect carbon costs is e xpected to rise signifcantly impacting the competitiveness of metals producers An ad equate system to limit the impact of indirect carbon costs on the most electrointensive industries is needed as well as other regulatory costs Other EnergyIntensive Industries are considering the potential to electrify their car bonintensive processes to meet Europe s 2050 targets It s imperative that the EU acts to ensure that carbonfree electricity is available at afordable prices for all the sectors that need it Electricity costs as of total production cost Electricity use per tonne of product MWht Zinc Copper Nick el Other Ell 385 27 0 19 0 10 383 Aluminium 154 4 4 5 1 The metals industry is 5X more sensitive to higher electricity prices than the manufacturing industry overal l 22 Source CEPS Ecofys Ecorys JRC 15 R egulatory challenges for a bellwether industry MET ALS IN A CLIMA TE NEUTRAL EUROPE A 2050 BL UEPRINT 17