Despite significant economic challenges, Europe continues to lead the world in terms of product policies and regulations that focus on sustainability. Examples include the Ecodesign Directive, energy and environmental labeling, Product Environmental Footprint, and the Registration, Evaluation and Authorization of Chemicals regulation (REACH). The goal is to work toward a carbon-neutral society using both market-based and regulatory instruments.
Our focus was on two regulations in 2013:
- Best Available Technologies of Reference (BREF): Through the European Aluminium Association, we actively contributed to the development of the BREF document and associated emission limit values for the non-ferrous metals industry.
- European Union Emissions Trading Scheme: Our European smelters and other facilities operating aluminum casthouses entered into this scheme as of Jan. 1, 2013.
The European Commission asked the Center for European Policy Studies to develop a study assessing the cumulative cost impact (direct, administrative, and compliance costs) borne by the European aluminum industry and attributable to European Union (EU) energy, climate change, environment, competition, trade, and product policies implemented between 2002 and 2012. One of the study’s results, which were released in 2013, show that the cumulative cost of EU rules and regulations ranged from 23% of profits in 2006 (the most profitable year) to 242% in 2011, when margins were lower because of the economic crisis.
These cost impacts contributed, in part, to difficult decisions we made in 2013 concerning locations that could no longer sustain operations from an economic viewpoint. We started decommissioning our smelter in Fusina, Italy, and we continued to maintain our curtailed smelter in Portovesme, Italy, as we wait for a potential buyer. In the first quarter of 2013, our smelters in Avilés and La Coruña, Spain, went from 50% to 30% curtailment.
Even in this challenging environment, we are committed to driving sustainability further into the day-to-day operations of our European businesses and products by focusing on Alcoa’s global strategic sustainability targets and investing in improvements to our facilities and environment, health, and safety management systems. For example, we have invested US$566 million (€425 million) to improve the environmental performance of our two Russian facilities since acquiring them in 2005.
Despite economic constraints in 2013, each of our locations continued to make progress against our corporate goals.