Position Paper: Carbon Border Adjustment Mechanism—Position for Trilogues

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The European Copper Institute (ECI) supports the EU’s climate ambitions for 2030 and 2050. Ambitious policies are needed to increase electrification, the deployment of renewables and energy efficiency to decarbonise the European economy and reduce dependency on Russian fossil fuels.

Copper is a crucial raw material for electrification and for the energy transition at large: it is the one non-ferrous metal used in all the main decarbonisation technologies today.More copper will therefore be needed in the coming years to enable the decarbonisation of the economy.

As an energy intensive industry, the copper producers that we represent in Europe are taking steps to decarbonise their production sites and are committed to working towards carbon neutrality by 2050. Copper producers today face the twin investment challenge of increasing production to meet the needs of the energy transition, while also investing to lower the environmental and carbon footprint of copper production.

In Europe, unprecedented energy prices are increasing the operational costs of copper smelters and refiners, and causing a competitive disadvantage vis-à-vis producers in other regions where energy prices remain lower. Access to affordable renewable and low-carbon electricity is a pre-requisite for decarbonising copper production. In the current context, this is a key concern for the industry.

We welcome the underlying idea behind CBAM to introduce a level playing field for carbon costs between EU and non-EU producers, which would allow phasing out the current carbon leakage protection measures under the EU Emission Trading System (ETS). In practice, however, several important concerns remain as to the ability of CBAM to establish a real level playing field, in particular in relation to the treatment of EU exports, the inclusion of indirect emissions, circumvention and the on-the-ground application of CBAM.

Copper is not included in the list of sectors to which CBAM will apply in the first instance. However, we note the intention of the EU institutions to expand CBAM to other ETS sectors in the future. In this regard, we are deeply concerned by the approach of the European Parliament that would mandate the application of CBAM to all ETS sectors by 2030 and empower the Commission to extend the scope of CBAM through delegated acts. The extension of CBAM to new sectors cannot be automatic and must be subject to impact assessments for each new sector. The extension into new sectors must also follow the ordinary legislative process to allow industry and other stakeholders the opportunity to engage in the decision-making process.

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Position Paper: Revision of the EU Emissions Trading System—Position on Trilogues

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The European Copper Institute (ECI) supports the EU’s climate ambitions for 2030 and 2050. Ambitious policies are needed to increase electrification, the deployment of renewables and energy efficiency to decarbonise the European economy and reduce dependency on Russian fossil fuels.

Copper is a crucial raw material for electrification and for the energy transition at large: it is the one non-ferrous metal used in all the main decarbonisation technologies today. More copper will therefore be needed in the coming years to enable the decarbonisation of the economy.

As an energy intensive industry, the copper producers that we represent in Europe are taking steps to decarbonise their production sites and are committed to working towards carbon neutrality by 2050. Copper producers today face the twin investment challenge of increasing production to meet the needs of the energy transition, while also investing to lower the environmental and carbon footprint of copper production.

In Europe, unprecedented energy prices are increasing the operational costs of copper smelters and refiners, and causing a competitive disadvantage vis-à-vis producers in other regions where energy prices remain lower. Access to affordable renewable and low-carbon electricity is a pre-requisite for decarbonising copper production.

In the current situation, this is a key concern for the industry. In this context, we call on the EU institutions to support a revision of the EU ETS in the trilogue negotiations which does not go beyond the level of ambition proposed by the Commission. Reducing GHG emissions by 61% by 2030 as proposed by the Commission is already a huge challenge for energy intensive sectors. The increase of the Linear Reduction Factor (LRF) to 4.2% and a one-off deletion of 119 million EUAs in 2024, reflected in the increase of the maximum benchmark improvement rate to 2.5%, would drastically cut free allocation to the copper sector by 50% compared to Phase III.

Revising the ETS in this way could lead to direct carbon costs of € 130 M eating up 22% of the free cash flow of copper smelters and refiners in the EU in 20301. During the same time period, the investments required for the decarbonisation of copper smelting and refining in the EU have been estimated at around € 600 M. It is important to note that significant additional capital expenditure will equally be needed to expand production capacity in order to meet growing copper demand.

Copper producers in Europe need the support of governments and EU policymakers to be able to make the investments required. If carbon leakage protection measures (direct and indirect) are phased down too quickly, European producers will face much higher carbon costs than non-EU producers. Because copper is traded on global commodity markets such as the London Metals Exchange, copper producers cannot pass on these costs to consumers without losing market share to global competitors.

Combined with the prospect of prevailing high energy prices in Europe, a faster reduction of carbon leakage protection would put at risk the future of copper production in the EU at a time when demand for copper to enable the faster deployment of solar and wind farms, heat pumps, batteries, electricity grids and other decarbonisation technologies is growing.

 

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Copper: The Material of Choice for Vehicle Manufacturers

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Growing electric vehicle (EV) demand has often gone hand-in-hand with growth in demand for copper. However, it is only more recently that it has been possible to estimate just how much this demand will increase, and what’s driving it.

New research, commissioned by the International Copper Association (ICA) and conducted by the Martec Group, has revealed that demand for copper in the wire harness in the light-duty automotive industry is expected to grow to more than 1.7 million tonnes annually by 2032. Simultaneously, overall copper demand related to EVs is expected to grow by 36 percent. 

As the automotive industry increasingly shifts focus toward the electrification and automation of vehicles, with the overarching goal of decarbonizing transport and facilitating sustainable development, fuel economy regulation, weight reduction and miniaturization are also expected to drive increased demand for copper in favor of aluminum and other substitutes.

What’s driving copper-based motors and EV technology

A typical vehicle with a standard internal combustion engine (ICE) has an estimated 23kg (51lb) of copper. When ICEs are compared to EVs, we find that an EV will have roughly three to four times more copper, which is mostly used in the copper rotor induction motor. But why is this? Copper has many applications in EVs, including wiring looms, winding wire (motors), energy storage (foil and busbars in batteries) and power cables. As a result of its naturally high conductivity, copper is the ideal material for the high-speed data wires needed in vision systems and sensors. Looking ahead to 2040, the research commissioned by ICA predicts that, among a wide range of components, the wiring loom alone will account for more than 50 percent of copper demand for EVs.

EV manufacturers have traditionally relied on rare earth metals for motors, but these metals have faced increasing availability and sustainability challenges, causing EV manufacturers to innovate. Offering greater reliability and sustainability than rare earth metals, copper has become the material of choice to increase energy efficiency in EVs due to its conductive properties. As a result, copper is and will continue to be a key enabler of the rollout of EVs across the globe, and in turn, the decarbonization of the transport industry.

Copper underpins EV charging networks

EVs aren’t the only drivers for copper demand in the automotive industry. Adoption of EVs globally will require a network of charging infrastructure. SAI Industrial LLC predicts the number of EV charging ports will grow from 3.2 million in 2021 to 152.3 million in 2040. This growing number of charging ports is expected to result in an additional 978,000 tonnes of copper being needed to meet demand for charging infrastructure in 2040, a dramatic increase from the 43,300 tonnes used for charging ports 2021.

Copper’s popularity for charging ports and stations is largely due to its natural electrical conductivity and durability. The metal’s role in EV infrastructure also includes power cabling and heavy equipment, such as transformers and utility grid upgrades.

The exciting move to autonomous vehicles

Beyond electrification, advances in vehicle technology are leading to increased automation. Vehicle automation requires multiple sensors, as well as additional on-board computers. A standard autonomous system, with 12 cameras, seven Light Detection and Ranging sensors (LiDARs), eight radars and one automated driving control unit, will all depend on copper connections to function safely and reliably. Each sensor and computer contain printed circuit boards, which require approximately 50 – 100g of copper depending on the board’s size.

However, when automation and electrification are combined, the amount of copper required for vehicle production further increases. Autonomous BEVs, for example, will require more than double the copper needed for electronics when compared to the conventional internal combustion vehicle. As the number of fully or semiautonomous vehicles on the road increases, so too will demand for copper components.

What’s next 

In total, depending on technological developments, the EV of the future may contain as much as 72kg

(159lb) of copper—significantly more than the copper used currently in an ICE vehicle. This trend demonstrates the importance of copper as a sustainable alternative to the rare earth metals that have traditionally been popular with vehicle manufacturers.

Copper’s place in the global rollout of EVs, autonomous EVs and charging infrastructure will continue to contribute to sustainable development, decarbonization and the global green transition goals—long into the future.

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About the International Copper Association 

The International Copper Association (ICA) brings together the global copper industry to develop and defend markets for copper and make a positive contribution to the UN’s Sustainable Development Goals. Headquartered in Washington, D.C., ICA has offices in three primary regions: Asia, Europe and North America. ICA and its Copper Alliance®️ partners are active in more than 60 countries worldwide. For additional information, please visit www.copperalliance.org.

LS MnM Inc. Contributes to the Circular Economy Through ESG Partnership with SK Networks

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International Copper Association (ICA) member, LS MnM Inc., is promoting circular practices in South Korea through its partnership with SK Networks.

Through SK Network’s MINTIT—a technology recycling program to recover and recycle copper from electronics (e.g., information communication technology; ICT)—the two companies are committed to promoting a “3R” (Reduce, Reuse, Recycle) approach to materials management. The partnership will center on recycling electronic devices, sharing research on recycling data and promoting recycling initiatives to the public. 

LS MnM’s partnership with SK Networks is a step forward for the company’s ESG initiatives that promote copper recycling in electronics. As a 100 percent recyclable material, copper can be used over and over again without any loss of its physical or chemical properties. Due to its high conductivity, nearly 70 percent of copper is used for electrical applications or communications; one tonne of copper can power 100,000 mobile phones or enable operations in 400 computers. Despite the material’s circular properties and essentiality to modern technologies, only 32 percent of annual copper use comes from recycled copper. Recovering copper from electronic and communication devices will enable LS MnM to meet demand sustainably while reducing carbon emissions.  

“Both the companies are sincerely committed to ESG management in their respective business areas, and this will facilitate our efforts to create synergy in the recycling industry and development of the circular economy.”— Tae-sun Choi, Vice President, Head of Raw Materials Division, LS MnM Inc.

Smart Recycling 

As a first step, the partnership will focus on recycling 50,000 mobile phones collected by SK Network’s MINTIT, which has built a used phone distribution platform operating via artificial intelligence (AI)-based ATM collection points. These smart ATMs allow the public to dispose of unwanted mobile phones in a convenient way through ATM machines. The AI-based ATMs inspect and purchase the mobile phones from users in a matter of minutes, sending payments directly to consumers’ accounts. The cost of the phone can also be donated to MINTIT’s social programs that support children who lack access to modern technologies. By making the recycling and collection of used electronics convenient for individuals, MINTIT helps to close the gap between consumer collection and electronics recycling. 

The partnership with LS MnM will ensure these collected phones are not sent to a landfill but recycled for their valuable material components. By recycling printed circuit boards (PCB) in the mobile phones, LS MnM will be able to recover important materials, such as copper, palladium, gold and silver.  

LS MnM and SK Networks/MINTIT believe promoting the circular economy is essential to sustainable business practices and plan to increase recycling efforts in the future through the partnership. While the initial project is focused on mobile phone collection, the collaboration is set to expand to include other electronics equipment and electric vehicle (EV) batteries.  

“As the synergy between the two companies has been confirmed through waste mobile phone recycling, more initiatives can be conceived to achieve both business growth and environmental value enhancement in more diverse fields,” and added, “We will together create a comprehensive collaborative plan in our pursuit of future-oriented and sustainable management.” —Yoon-eui Kim, Head of ICT Business Division, SK Networks 

Promoting Circularity Through Industrial Symbiosis and Smart Production 

The collaboration with SK Network and MINTIT is a familiar model for LS MnM. The company maintains multiple partnerships encouraging industrial symbiosis, or the use of one industry’s byproducts or waste by another. In addition, LS MnM has partnered and invested with leading U.S. electronics recycler and cybersecurity-focused hardware destruction company, Electronic Recyclers International (ERI). ERI has the capacity to recycle more than a billion pounds of electronic devices annually, servicing every state in the U.S. and maintaining a network of more than 100 facilities across 46 countries. Through the partnership, LS MnM provides metal recycling services to ERI after the electronics’ collection. ERI tracks its materials collection, and through AI-operated robotics and specialized shredder technology, it prepares the unwanted electronics for recycling at their zero-waste, zero-landfill facilities. 

To enhance its smelting and recycling capabilities, LS MnM is developing the “Onsan Digital Smelter,” which will implement AI, big data and internet of things (IOT) technologies for more efficient and eco-friendly production. The smart factory system will connect the entire production process, enabling more efficient procedures, as well as optimizing the smelter to increase safety and reduce environmental impact at its operations. With these increased efficiencies, LS MnM will be able to support its circular partnerships with even greener operations, providing responsible and sustainable copper for green technologies. 

 

About LS MnM Inc.

Headquartered in South Korea, LS MnM Inc. is a leader in the global copper and precious metals smelting market. LS MnM produces and supplies high quality basic materials using innovative copper smelting know-how. The company employs the highest level of technology while maintaining its status as an environmentally friendly business.  

About the International Copper Association 

The International Copper Association (ICA) brings together the global copper industry to develop and defend markets for copper and make a positive contribution to the UN’s Sustainable Development Goals. Headquartered in Washington, D.C., ICA has offices in three primary regions: Asia, Europe and North America. ICA and its Copper Alliance® partners are active in more than 60 countries worldwide.