Lubin, 15 July 2020
ZPPM / 66 / VII / 2020
Directorate-General for Financial Stability, Financial Services and Capital Markets Union
Unit B2 – Sustainable finance
Employers’ Organization of Polish Copper welcomes a European Green Deal to put Europe on the right track to a sustainable future and is prepared to take the necessary measures to make it the world’s first climate neutral continent.
As the representative of the Polish metals mining, processing and smelting industry, we welcome the Commission’s renewed sustainable finance strategy as a part of actions for a greener and cleaner economy and agree that a socio – economically efficient, sustainable and flexible financial system is essential for long-term value creation.
The European mining industry plays a critical role in underpinning economic growth. The development of mineral resources is a pillar for many national economies, in terms of contribution to gross domestic product, foreign direct investment, tax & royalty revenues as well as other governmental revenues. Even more, the mining industry produces more than 42 different metals and minerals and employs 350.000 people directly and about 4 times as many indirectly. Modern extraction and processing of minerals and metals has brought huge benefits to society while reducing pressures on the environment, addressing green-house gas emissions, tackling pollution, minimizing waste and improving efficiency in the use of natural resources. Even more, the mineral industry will continue to enable downstream sectors to realize all these improvements.
All European strategic value chains are related to the two main drivers of industrial transformation – the transition to a climate-neutral economy and to a data-driven economy. They are directly linked to improving competitiveness, fighting climate change, and enhancing technological development. And all of them will inevitably require raw materials: not only those that are currently being tagged as “critical”, but also huge amount of base metals such as copper, aluminium, silver, lead and others.
Europe’s metal producers are switching to clean electricity more than any other energy-intensive industry as one of the world’s leading environmental champions. Compared to 1990 levels, the European non-ferrous metal industry already reduced its greenhouse gas emissions by 61% in 2015.
Without the products of the European non-ferrous metals industry, the ongoing technological revolution around us would be much slower and much smaller than what we are all used to in recent years.
For example, about 15-20 tonnes of copper are needed to produce one 2 MW wind turbine, while the construction of a 1 MW solar power plant requires between 3.1 and 4.5 tonnes of copper. Another opportunity for copper is electro-mobility – up to four times more copper is needed to manufacture an electric vehicle than a combustion car, and another area of application is vehicle charging infrastructure.
As early as 2017 the World Bank predicted that by 2050, the growing production of wind turbines will require 300% more metals, 200% more metals for solar panels and 1000% more metals for battery production.
Other future metals are molybdenum and rhenium. The first is widely used in the aerospace, defence, oil, nuclear and electronics industries – more than two-thirds of production is used as an additive in alloys, mainly in high-strength and high-temperature steels. On the other hand, rhenium, of which KGHM is the only European producer, is used, due to its very high melting point, for the production of jet engine turbines, gas turbines and covers for space vehicles. Silver and palladium are also used in the electronics industry and in medicine.
European Green Deal will require more copper, here are the reasons:
Copper plays an important role in renewable energy solutions – such as solar, wind, todal, hydro, biomass and geothermal – by improving their overall performance. For example a 3 MW wind turbine contains up to 4,7 tons of copper. In case of solar energy due to its intrinsic characteristics copper has always been the material of choice for the efficient extraction of electricity from solar cells. Relatively thick but soft copper is preferred for use in silicon cells to reduce fragility, and because soft copper offers faster throughput and better low yield strength.
Copper has the highest electrical conductivity of any metal, after silver. Products containing copper (e.g. engines) tend to operate more efficiently, with typical cost-effective reductions in energy use in the range 20-30%.
Beyond the energy sector copper is also key component in new, low-carbon modes of transportation, such as electric vehicles, playing an important role in their batteries and control systems as well as charging infrastructure. An electric car contains on average almost four times more copper than its counterpart with a combustion engine (83 kg to 23 kg).
Compared to 1990 levels the European copper industry has managed to reduce its per-unit energy consumption by 60%. Emissions from copper production in Europe are now very modest at 0.4% of total EU greenhouse gases emissions.
In addition copper is 100% recyclable and can be used over and over without losing its engineering properties. Copper is also a carrier of valuable metals present in electronics, batteries (cobalt for instance, is as a key by-product of copper metallurgy – 60% of cobalt production; other metals accompanying copper are, inter alia, nickel, silver and gold).
Greening by European mineral products also trigger emission reductions in other sectors of the economy.
Furthermore, in November 2018 the European Commission underlined the importance of continuing exploration and extraction in its document, A Clean Planet for all, a strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy by 2050. “Raw materials are indispensable enablers for carbon-neutral solutions in all sectors of the economy. Given the scale of fast growing material demand, primary raw materials will continue to provide a large part of the demand.”
In this context, we believe that the renewed sustainable finance strategy should ensure an integrated approach, providing consistency, stability and predictability along the whole value chain by:
We would like to underline another important aspect .The renewed Sustainable Finance strategy has been announced in support of the efforts to finance the Green Deal ambitions. It is now being developed while Europe is progressively exiting from the unprecedented crisis caused by the COVID-19 outbreak. The strategy will therefore need to respond to the dual objective of mobilising more investments towards EU’s sustainability goals and of enabling the short-/medium-term recovery of the whole European economy.
The COVID-19 outbreak, which is first and foremost a sanitary crisis, has put the EU economy in a very critical situation. This makes a comprehensive recovery strategy absolutely necessary, one that considers environmental, social and economic aspects in a mutually reinforcing way. It also increases the investment demand for a more sustainable and resilient economy, and reminds the central role of companies in ensuring the resilience and dynamism of Europeaneconomies and their role in society.
Beata Staszków, President of the Board/ Chief Executive Officer
Position based on documents by: KGHM, Euromines, BusinessEurope