With the Spring Budget set to be released next week (6 March), we sat down with CEO Tom Jones to discuss the need for government support in safeguarding the future of the UK aluminium industry.
As a key ingredient for clean technologies like electric vehicles and renewable energy generation, aluminium is vital for the global transition to net zero. Despite the economic outlook for global aluminium for its use in a green economy being strong, domestically the industry finds itself at a pivotal juncture. In recent years, UK aluminium has encountered significant challenges which limits its competitiveness within international markets: namely volatile energy prices and supply chain disruptions aggravated by global conflict, uneven trade policies and increasingly stringent carbon emissions requirements, all compounding to put the UK industry in a difficult situation.
Generally, there has been a real lack of government support for UK aluminium. Indeed, last year’s Autumn Statement announced £4.5 billion funding for British manufacturing to boost investment across eight sectors, including automotive, aerospace and clean energy – all of which rely on a strong UK aluminium supply chain. However, while certainly a welcome measure and a boom for the industry, it comes as too little too late, and we need to see further and stronger mechanisms put in place to protect the resilience and longevity of an industry worth almost £8 Billion of GVA to the UK economy.
Ahead of the Spring Statement, we’re calling on the government to take proactive measures aimed at both fortifying and invigorating the UK aluminium sector. Practically, these should come in the form of instruments designed to stimulate private investments and onshore manufacture to the UK, enabling us to bolster the industry’s resilience during a difficult economic climate and enhance its competitiveness on the international stage.
Moreover, we’re advocating for a recalibration of the regulatory frameworks governing the pricing of carbon. Late last, year the UK’s carbon price fell to an all-time low, both casting a shadow on the UK’s commitments to net zero and compromising our ability to engage in trade with Europe through the Carbon Border Adjustment Mechanism (CBAM). By introducing more stringent carbon pricing regulation and creating levers for raising carbon prices, we can foster a more equitable international trading environment, prevent carbon leakage and advance the climate objectives of the industry.
In addition to addressing economic challenges, it is imperative to confront issues pertaining to unfair trade practices head-on and advocate for a level playing field in international trade agreements. By safeguarding the UK aluminium industry, we can not only protect thousands of jobs and businesses but also strengthen our nation’s industrial base and contribute to economic growth and prosperity.
Without decisive government intervention, the UK aluminium supply chain remains vulnerable to unfair competition and trade tensions – amidst the backdrop of fluctuating legislative landscapes and supply chain disruptions, maintaining clear and consistent lines of communication with the government is paramount. We stand ready to collaborate with policymakers to develop and implement effective strategies that will secure the future of UK aluminium.
The Spring Budget presents an opportunity for the UK government to demonstrate its commitment to supporting domestic industry. By allocating resources and enacting policies conducive to the prosperity of UK aluminium, the government can lay the foundation for a resilient and thriving economy that will endure for generations to come.
For more information on ALFED, or to become a member, visit www.alfed.org.uk.
