regulatory or other interventions Moving forward with the transition to a climate neutral electricity system it is possible that the e xposure of nonferrous metals producers will further increase Furthermore higher electricity prices might stall investments in electrifca tion in other major materials industries and hence the overall transition to a climate neutral economy Secondly while metals are trade globally or at globally consolidated prices this does not mean all metals are produced equally There is strong evidence for major stateaid interventions e g bailing out production overcapacity and support e g subsidies in metals production outside of the EU in particular in China While this does not necessarily imply higher imports into Europe it will depress global metals prices and the possibility for European metals producers to compete on a level playing feld 7 2 Electrointensive processes local power pricing versus global metal mark ets This section discusses the electrointensity of EU nonferrous metals production and its impact on production costs in comparison to other energy intensive industries as well as metals production in major producers outside of the EU This is followed by relation be tween the economic sensitivity of metals production to rising electricity prices e g due to regulatory costs and the impact on economic performance and competitiveness Electrointensity of metals visavis other energy intensive materials Amongst the nonferrous metals aluminium is the largest consumer of electricity 63 TWh in EU28 EFT A and 315 TWh in EU28 followed by Zinc 9 TWh in EU28 Norway Copper 4 TWh in EU28 and Nick el 0 6 TWh EU28 Norway 241 A t the level of electricity consumption per tonne of metal primary aluminium is the most electrointense 154 MWht followed by silicon 124 MWht ferrosilicon 89 MWht nick el 53 MWht zinc 39 MWht and copper 15 MWht Compared to other energy intensive industries production processes nonferrous metals production electrointensity is clearly higher with the e x ception of chlorine production 241 Source European Aluminium International Zinc Association Europe and the Nick el Institute Aluminium EU electricity use data estimated using EU production fgures Copper assuming 15 MWht electricity use and 2 73 Mt copper production in 2015 7 Nonf err ous me tals a bellw e ther indus try challenges f or nonf err ous me tals pr oduction on the pa thwa y t o EU clima te neutr ality 7 1 Introduction the pitfalls of a frontrunner industry The nonferrous metals industry can be seen as a frontrunner or bellwether industry within the overall industrial and materials transition to a climate neutral society First of all nonferrous metals production is already highly electrointensive It is e xpected that other major materials industries such as steel and chemicals will become highly elec trifed on the path to climate neutrality e g through the electrifcation of heat more use of electrochemistry and higher use of hydrogen 240 Secondly nonferrous metals are a frontrunner when it comes to circularity with very high recovery rates and a large part of the industry has established business models around the recovery of metals Other materials and energy intensive sectors in particular petro chemicals cement and concrete will have to embrace much higher levels of high quality circular use of materials e g chemical recycling of polymers to be able to reach deep GHG mitigation Thirdly it is beyond doubt that nonferrous metals are and will be critical for the value chains that will shape Europe s transition to a climate neutral economy Batteries wind and solar energy new transport systems further digitisation and the electrifcation of other sectors and industries in general will hugely depend on the availability of all types of nonferrous metals The nonferrous metals industry has embraced industrial and sectoral symbiosis by striking better synergies between metals producers or across the value chain to enhance recovery of metals by delivering important byproducts to other industries and by starting to inte grate energy systems with other sectors such as the buildings sector where possible The industry has also been at the forefront of globalisation Amongst the basic materials produced it is the only industry that sees consolidated global price setting for most of its products with the LME being a crucial pricing instrument Being at the forefront of a major transition also implies that the sector is amongst the frst to feel possible negative sideefect in particular the collision between being pricetak ers in a global mark et on the one hand and on the other hand local or regional factors that have an important impact on production costs Foremost for an electrointensive industry there are the local and regional electricity price developments including cost increases due to 240 W yns Khandek ar R obson 2018 MET ALS IN A CLIMA TE NEUTRAL EUROPE A 2050 BL UEPRINT 67