The Federation of Aluminium Consumers in Europe (FACE) complained that European aluminium producers have been lobbying for Russian aluminium products to be included in the mooted twelfth sanctions package purely for commercial gain and will hurt Europe’s economy more than Russia’s.

“Aluminium was the target of a vigorous and persevering lobbying campaign from competitors of Russian producers and some industry associations, and it finally made its way up to the Commission’s proposal for the 12th EU sanctions package,” FACE said in a statement on November 16.

“We have the feeling that, under pressures, aluminium had to be added to the new Commission proposal at all costs, even without regard to far more unintended consequences than hard-power
efficiency,” FACE added.

Russia is a major producer of aluminium that is a crucial input in European industry, but until now has not been sanctioned. Amongst the measures included in the new twelfth package, currently being debated in Brussels, are several, but selected, aluminium products.

The list of aluminium products that the Commission intends to include in the twelfth sanctions package, according to the media leaks, is very limited in volume but represents a significant share of EU imports for wire rod (17% in the first semester 2023), which means little substitution options for consuming European SMEs who risk serious repercussions, FACE claims.

“But this almost symbolic (and therefore senseless) list will, if approved, have a perverse effect: it will continue to feed market anxiety and uncertainty. People keep wondering “what’s next?”, and this instability contributes to keeping an upwards pressure on prices, which is terrible for the SMEs of this very low margin industry; and it is a bonanza for those whose market capitalisation and bonuses are linked to sales prices and who happen to be the fierce advocates of trade restrictions and sanctions,” FACE said.

As bne IntelliNews has reported, the disruptions to the supply of energy and key raw materials inputs since the sanctions were introduced has badly hurt European industry, with many heavy industrial businesses becoming economically unviable and forced to either close or dramatically reduce production. While Europe’s politicians remain committed to supporting Ukraine and imposing extreme sanctions on Russia to limit the Kremlin’s income, European industrialists are less happy and want to see sanctions curbed or ended.

“Sanctions are a kind of economic tactical nuclear bomb and therefore should be handled with extreme care, especially avoiding that the radiation – the unintended consequences – come back to hurt us and for a very long time,” FACE said.

FACE’s Secretary General, Dr Mario Conserva commented: “Adding aluminium products to the twelfth sanctions package proposal is not a great demonstration that the EU has a strategic compass: it will not help accelerate the end of the war in Ukraine, it will further redirect Russian low carbon supplies, that we so badly need, to China and other competitors, and it will deepen market anxiety and therefore contribute to price rises that will put hundreds EU companies at risk of closure”.

FACE is calling on the EU Member States and the Commission to “carefully reflect again before opening another pandora’s box within our vast sanctions arsenal,” that could do “much more harm than good to our industrial strength and decarbonisation efforts,” the two pillars of the goal declared by President Von der Leyen to make the European Union “the world’s first sustainable power”.