Reactions of various stakeholders (including Eurometaux) to the Commission’s call for action on commodities and raw materials
Source: European Commission RAPID
Subject: The Commission calls for action on commodities and raw materials
Date published: February 2, 2011
Excessive volatility of prices on all major commodity markets occurs at a time when the competitiveness of European industry crucially depends on efficient and secure access to raw materials. Raw materials are vital for the EU’s economy and particularly crucial for the development of modern environmentally friendly technologies such as electric cars and photovoltaics. The recent volatility in commodity prices threatens to increase inflation and global raw material markets are becoming increasingly distorted due to protectionist measures. The price fluctuation on the agricultural commodity markets has an impact on farmers, food-makers and consumers, including in the poorest countries. In response to these challenges, the European Commission presented today an integrated strategic vision to tackle challenges in Commodity markets and on Raw materials. The Commission proposes actions to improve the regulation, functioning and transparency of financial and commodity markets. The European Commission also calls for the swift implementation of the Raw Materials Initiative adopted in 2008. The Communication on commodities and raw materials contributes to the Europe 2020 flagship initiative 'A resource-efficient Europe' that was adopted last month
President Barroso said: “'In order to secure supply of raw materials for the European industry for coming years, we need to link this policy with our reforms of the regulatory framework for financial markets. Better understanding the synergy between the two will ensure that supply of commodities and raw materials matches demand in a resource-efficient way, contributing to sustainable growth in the European Union."
The European Commission presents an overview of developments in financial and physical markets and outlines what has been done since the launch of the Raw Materials Initiative. This includes achievements such as identifying critical raw materials, actions in the area of trade and development, guidelines that clarify how extraction in the EU can be compatible with Natura 2000 requirements, new research opportunities under the 7th Research Framework Programme and development of end-of-waste criteria.
In today's Communication, the European Commission proposes a series of measures, based on its Raw Materials Initiative to ensure a fair and sustainable supply of raw materials from global markets, to foster sustainable supply within the EU and to boost resource efficiency and to promote recycling.
At the same time, recent developments on commodity markets show that the prices of derivative and physical markets may be linked in multiple ways. Clearly, the price of commodity derivatives is influenced by the price of the underlying commodity. It is also clear that investors increasingly use commodity derivatives as part of their strategic investments.
Financial market regulation is one important response to these developments. The regulatory initiatives already undertaken or planned for the coming months will ensure enhanced integrity, transparency and stability of commodity derivative markets. The Communication also notes that further work is necessary to understand fully the interlink between physical and financial markets. The European Commission intends to continue working on this matter, in the framework of the G20-debate taking place at the global level.
The key elements of the integrated strategic approach include:
· Improving the integrity, transparency and stability of commodity derivatives markets, inter alia through a review of the Directives on Market Abuse and Markets in Financial Instruments;
· Undertaking additional research on developments in financial and physical commodities markets with the aim of identifying how the linkages work;
· Regularly updating the list of 14 critical raw materials already identified by the European Commission;
· Monitoring the development of access to critical raw materials with the view to identifying priority actions;
· Strengthening the EU’s trade strategy in relation to raw materials and pursuing the "raw material diplomacy" to address raw materials priorities in bilateral and multilateral frameworks and dialogues;
· Developing a bilateral co-operation with African countries in the area of raw materials, based on promoting governance, investment and geological knowledge and skills;
· Working closely with Member States and other stakeholders to improve the regulatory framework for sustainable extraction within the EU;
· Enhancing resource efficiency and promoting recycling, by tackling the waste levels due to sub-standard treatment inside or outside the EU and obstacles to the development of the recycling industries through for example the strengthening of the enforcement of the directive on waste from electrical and electronic equipment;
· Further promoting research and innovation efforts along the entire value chain of raw materials, from extraction, processing, recycling and resource efficiency to substitution.
For more information on the Commission’s raw material policy:
Source: Greens/EFA group
Subject: Commission proposal undermined by lack of focus and poorly-defined measures
The European Commission today presented its long-postponed raw materials strategy after months of delay. The Greens are expressing concern that, instead of setting out a coherent and focused strategy, the Commission's approach is too broad and not well defined. Commenting on the strategy, Green MEP Reinhard Bütikofer, the EP draftsperson on the strategy, said:
"The long-awaited proposals on raw materials are hampered by a lack of focus. While the communication has been improved in certain areas based on earlier drafts, the Commission has spread the strategy too thin and, in promising all things to all people, resorted to setting out half measures instead of developing a coherent focused strategy.
"Recycling and resource efficiency should be cornerstones of any comprehensive raw materials strategy, and the Commission communication remains weak on this. It does, however, represent an improvement on earlier drafts, which had widely ignored the role of recycling and efficiency. The Commission sets out some worthy concrete proposals like the creation of a global certification system for recycling installations for example. The strategy falls short on the recycling of rare earths though.
"The EU will have to quickly act on recycling and efficiency if we are to tackle our unsustainable raw material dependence; the failure to do so risks Europe being left behind in the global move towards green innovation and technologies, and at the same time damaging our future competitiveness.
"The Commission also fails to develop a convincing strategy for fair cooperation with countries that are rich in raw materials. A strategy for cooperation with China, which is responsible for over 95% of the global production of rare earths, is also lacking. While the rhetoric on raw materials diplomacy is less confrontational, the Commission has not set out a coherent political vision."
Richard More O'Ferrall,
Press and media officer,
Greens/EFA group in the European Parliament
Mobile: +32-477-443842 - Ph. +32-22841669 (Brussels); +33-388174042
Source: BusinessEurope
Subject: Security of raw materials supply is a key priority for European industry
Date published: February 2, 2011
Access to raw materials under fair conditions and at affordable prices is a vital issue for the competitiveness and future of European industry. Even at this early stage in the global recovery, raw materials prices are up 20% since last year, and market distortions are on the rise with at least 1,250 export restriction measures in place, including by China and Russia
The publication of the 2011 Communication on Commodity Markets and Raw Materials Challenges should signal the start of a period of delivery of concrete results to ensure the proper functioning of global markets and security of supply for raw materials in Europe.
The EU should:
· Forge an international consensus in support of undistorted trade in raw materials in the OECD, WTO and G20,
· Improve conditions for extraction of raw materials in Europe,
· Develop secondary materials markets in Europe,
· Stimulate innovation in substitution and resource efficiency.
BUSINESSEUROPE Director General Philippe de Buck said: ‘The security of our raw materials supply has become a key priority for European industry. Countries have the right to determine how they develop their natural resource industries, but should not intervene in markets to subsidise access to raw materials for their own industry. The EU strategy should be well coordinated and implemented rapidly’.
Source: Eurometaux
Subject: Eurometaux welcomes the Commission’s Communication on “Tackling the challenges in Commodity Markets and on Raw Materials”
The European Non-Ferrous Metals industry welcomes the issuing of the Communication on Raw Materials in follow-up to the 2008 Communication, and calls for swift and concrete implementation of the objectives and actions identified.
Access to raw materials is critical for the non-ferrous metals supply chain. Key sectors like the automotive, construction, aerospace, machinery and food packaging sectors all depend on access to raw materials, a cornerstone of harmonious economic development. The achievement of the ambitious EU
2020 strategy depends highly on Europe’s ability to secure competitive and sustainable access to raw materials. The increasing race for non-energy raw materials, which is putting significant pressure on both the primary and secondary raw materials markets, makes this issue a high and urgent priority.
Eurometaux welcomes the increased focus on innovation and research as a means to boost resourceefficient solutions.
Eurometaux believes that the three pillars identified - access to Raw Materials inside the EU and on international markets, resource efficiency, and recycling - are important and complementary. Europe, the most advanced region for recycling, has established a well-developed recycling sector with huge growth potential, providing it can access secondary raw materials. Europe has experience and know-how in the primary raw materials field: European-based mining and metallurgical companies contribute to the development of sustainable industrial value chains, including for critical raw materials identified by the EU.
Eurometaux therefore wholeheartedly supports the need to ensure the sound implementation of existing legislation such as the Waste Shipment Regulation as a means to address the critical problem of illegal shipments of raw materials. Illegal exports of valuable secondary raw materials undermine the EU objectives of making Europe a resource-efficient society, prevent collection targets from being met, and constitute a misuse of the EU taxpayers’ money.
Eurometaux firmly believes that the urgency of the problem requires swift implementation of the objectives and actions identified, and calls for their materialisation in concrete measures addressing trade distortions and illegal practices in a balanced and sustainable way, creating the appropriate conditions for Europe to operate and develop in a fair level playing field.
The last-minute inclusion of commodity markets in the Communication raises new and important considerations, which no doubt would have been better addressed by other means. Eurometaux strongly recommends that the two issues – raw materials access and commodity markets - be dealt with separately so as not to impede their implementation.
For further information, please contact:
Eurometaux – European Association of Metals
Guy Thiran, Secretary-General
Tel. +32 2 775 63 10
Source: Oxfam
Subject: Oxfam reaction to European Commission’s Communication on commodity markets and raw materials
The European Commission today unveiled a new strategy on how Europe should protect its access to raw materials and the issue of regulation of commodity markets including farm goods.
On commodity markets and speculation:
Marita Wiggerthale, Oxfam’s food and agriculture expert, said:
“It is welcome that the EC appears now to be listening more closely to growing evidence of the role which speculation plays in driving up food prices.”
“Even in times of good harvests, food price volatility affects poor people’s ability to feed themselves and their families. Governments must intervene to regulate the commodity markets, as part of a wider range of measures to improve food security for the world’s poorest people.”
“Yet, Europe can’t just talk the talk, it must also walk the walk. The EU must move to integrate measures to tackle food speculation within proposals on EU financial market reform and work with the G20 to ensure appropriate measures are also adopted at the global level.”
“Just three years after the 2007/08 spike in cereals prices on world markets, the sharpest seen in 34 years, food prices are on the rise again and causing alarm. Some countries such as Sudan, Mauritania, Afghanistan and Mongolia are already seeing wheat prices rising at home because of higher world market prices.”
On access to raw materials:
David Hachfeld, Oxfam’s trade expert, said:
''It is shameful that Europe appears willing to pursue its own narrow commercial interests in its relations with developing countries, with little real effort to ensure there is mutual benefit. Promises about a better partnership with Africa still look like window dressing for a forceful diplomatic and trade strategy.”
“On one hand, the EC is attempting to force developing countries to ban or curb the use of export taxes, which many rely on to help them develop. On the other, the EC is trying to negotiate new rules on investment that will give European companies unprecedented access to developing country raw materials on the same or even better terms as local businesses.”
CONTACT: Angela Corbalan on + 32 473 56 22 60 or angela.corbalan@oxfaminternational.org
Source: European Paper Industry
Subject: Focus on industrial raw materials must be kept clear
The European Paper Industry welcomes the Commission’s communication on raw materials, adopted today. Concrete actions are needed to address the increasingly critical supply of raw materials to European Industries. This includes the raw materials of the European Paper Industry: The push for renewable energies calls for a biomass supply policy across Europe, taking the use of wood as raw material as a priority. The massive exports of recovered paper collected in Europe to east Asian markets is a second reason why raw material policy is needed. The Commission communication rightfully addresses both issues.
However, CEPI points out that EU has to keep a clear focus while addressing intrinsically different markets of raw materials, energy and agricultural commodities
The European pulp and paper industry’s raw material base is in Europe. Because of their renewable nature they are much sought-after. A strategy for the sustainable supply of wood and biomass is therefore needed, including concrete measures for raw materials mobilisation from European primary and secondary sources. The promotion of the resource hierarchy principle, whereby raw materials are used first to deliver added value in products, would bring consistency in EU policies
“Facilitating access to raw materials that end up in subsidy-based, unsustainable business models does not make sense” said Teresa Presas, CEPI’s Managing Director. “Instead, the priority access should be for industries that use the resources efficiently and contribute to the EU 2020 competitiveness and climate change goals.”
The European Paper Industry has already achieved a record-high recycling rate with more than 70% in 2009. It is seeking for even higher levels, but to do so, policy support is needed. Therefore CEPI applauds the proposed actions to better implement and enforce existing waste legislation, in particular waste shipment controls and separate collection by 2015.
Highlighting the importance of looking at full value chains and full life-cycles, Teresa Presas said: “The European Industry must be put in a position to use the collected secondary materials, otherwise we spend money to see them exported to countries where the environmental standards are far from being met. Certifying recycling facilities for sound environmental management is an approach CEPI is happy to support”.
Source: Dods EU Alert