Moutarlier hinted at the much-awaited update on procurement rules on Thursday January 15 during a panel discussion at the Future Minerals Forum in Riyadh, Saudi Arabia.
Talking about the willingness to pay for a green premium metal and how regulation could help incentivize the uptake of lower-carbon-emission metals that often come with a higher price tag, the official said the EC is looking at this now.
“We will be coming later on this month with our Industrial Accelerator Act, trying to tie green products with public procurement or subsidy plans so that there are incentives that as regulator we can bring to bridge the gap,” Moutarlier said.
“We need to be selective and we will probably start at least with green steel in our proposal later this month. This is not something that we will be able to impose all throughout the different projects and for all the different material,” Moutarlier added.
The panel also discussed other incentives that could help uptake, such as a proposed floor for critical minerals to help boost the market.
Trading for green metal premiums remains slow in Europe amid economic weakness, which remains a hurdle to committing to a premium if there is no obligation.
Fastmarkets’ weekly assessment of flat steel reduced carbon emissions differential, exw Northern Europe was €40-50 ($46-58) per tonne on Thursday, stable week on week.
Fastmarkets’ monthly assessment of aluminium low-carbon differential P1020A, Europe was $0-30 per tonne on January 2, up from $0-20 per tonne on December 5. In comparison, the European low-carbon premium lags behind Asia, with Fastmarkets’ aluminium low-carbon differential P1020A, Japan, South Korea assessed at $40-85 per tonne on January 2, stable month on month.
With carbon costs increasingly in focus, plans such as the Carbon Border Adjustment Mechanism may be an incentive to buy lower-carbon-emission material, even if there is no intention of greening the supply chain, according to panelists.
“It’s not even always a willingness to pay for green, but sometimes it’s a pure cost calculation that you’re avoiding CO2 cost,” Christian Hoffmann, partner Metals & Mining Practice at McKinsey, said on the panel. “And that avoidance of CO2 cost makes it a business case,” Hoffmann said.
Author: Laura Varriale
