8 September 2022

Metal industry warns of bankruptcy following rampant electricity prices 

Approximately 40 large companies in the metal sector have warned that the energy crisis represents an existential threat that could drag parts of the industry into bankruptcy. In a letter addressed to the EU, the European industry organisation Eurometaux pleaded for urgent measures to save the industry. One of the signatories to the letter is the Swedish company Boliden, which produces, among other things, zinc, copper and nickel. “The EU needs to get control of this situation so that one gets somewhat reasonable production conditions in terms of zinc and aluminium in Europe, otherwise we will be outcompeted by countries outside the EU,” stated Klas Nilsson, Head of Communications at Boliden. While Boliden remains stable compared to other producers, not least in Europe where some companies have been temporarily forced to close facilities due to rampant electricity prices, he warns the company will not survive in these conditions in the long-run because there are no zinc smelters in Sweden. Boliden does somewhat better than competitors due to the fact that the company has certain long-term agreements. But over time Boliden will be in the same situation as everyone else.

DN

EU Cohesion Policy: EUR 155.7 million for a just climate transition in Sweden

Thanks to the Just Transition Fund (JTF) programme adopted by the European Commission, Sweden will receive an EU grant of EUR 155.7 million to support the country's efforts to achieve climate neutrality and mitigate the impacts of the climate transition by 2045. Sweden will mobilise a total investment of EUR 311.5 million to help ensure that this transition does not leave anyone behind in the local economy and society. The JTF support will help Swedish industry transition to climate neutrality, while maintaining competitiveness and sustaining economic and employment levels in the counties of Norrbotten, Västerbotten and Gotland. As industrial emissions account for 32% of Sweden's total greenhouse gas emissions, the transformation of the steel, mineral and metals industry, which are the main greenhouse emitters, will have an important socio-economic impact. The JTF will help alleviate this impact by investing in research and innovation and in the retraining and reskilling of workers. Because of the scale of the decarbonisation challenge, the JTF will also support targeted investments to reduce greenhouse gas emissions in activities covered by the Emissions Trading System, such as steel and cement production. These investments are essential to maintain jobs in these sectors and will ensure that the emissions will be significantly reduced, in line with the requirements of the JTF Regulation. Finally, EUR 9 million of the JTF will contribute to the increased capacity of Gotland's electricity grid. A strengthened electricity grid on the island of Gotland as well as an increased share of renewable electricity generation are prerequisites for the conversion of the cement plant in the county.

European Commission

SkyFuelH2 takes the next step – applies for co-funding for a feasibility study

Uniper Sweden has submitted an application to the Swedish Energy Agency for co-financing of a broad implementation study of SkyFuelH2 through Industriklivet. The total estimated cost of the study is SEK 523 million and the application includes co-financing of approximately SEK 261 million from the Energy Agency. In April 2022, Uniper and the municipality of Sollefteå signed a letter of intent to further investigate the possibility of establishing SkyFuelH2 in Långsele together with Sasol ecoFT in South Africa. Assuming that the Energy Agency provides a grant and financing is secured, the study will provide the financial, technical and environmental conditions required for a final investment decision for SkyFuelH2. With SkyFuelH2, Uniper plans to use the so-called Fischer-Tropsch technology to produce sustainable aviation fuel on an industrial scale for the first time, together with Sasol ecoFT. The fuel is made from biomass and hydrogen generated from water and renewable electricity. The biomass comes from residual products from forestry recycling, which means a fully sustainable value chain. SkyFuelH2 is expected to reduce greenhouse gas emissions by 323 tonnes of CO2 per year and provide a sustainable alternative equivalent to approximately 8% of Sweden's annual domestic aviation fuel consumption. 

Sollefteå Kommun, Press Release

Green hope for Danish stocks during deep energy crisis

On 7 September, Ørsted's share price benefited from the European Commission's proposal for a price cap on non-gas-fired power generation. The proposal also gave Vestas a tailwind. Vestas rose 1.2% to DKK 177.68 and Ørsted rose 4.0% to DKK 725.90. Due to the ongoing energy crisis, Ørsted is seen as a potential winner in the race to transform the world into a renewable energy source. Goldman Sachs believes that Ørsted remains an important recipient of the long-term electrification process. Accelerating investment in renewable energy should support further revenue growth, while expansion in target markets could support substantial returns in the future. Goldman Sachs also says that in 2021 and 2022, the Danish energy company has secured more than its target of 3 GW per year of projects in offshore wind farm development and that the company's development pipeline looks good for at least 2028. In its analysis, Goldman Sachs highlights the long-term potential of wind and solar energy to drive down energy prices, and the attractiveness of the investment given the current energy crisis. 

Euroinvestor, Euroinvestor

EU provides substantial funding for Finland to promote the plastics recycling economy

A major cooperation project to promote a circular plastic economy is being launched in Finland. The PlastLIFE SIP project, piloted by the Finnish Ministry of the Environment and the Finnish Environmental Research Institute (SYKE), is part of the EU's LIFE programme and has a total budget of approximately EUR 20 million. The goal is to achieve a sustainable plastics recycling economy in Finland by 2035. The seven-year project will start in January 2023 and run until the end of 2029. PlastLIFE is coordinated by SYKE and brings together a wide range of participants to develop ways to reduce the environmental damage caused by plastics and littering and unnecessary consumption. The project will also develop ways to enhance the recycling of plastic waste, use recycled plastics, find alternative materials and solutions for plastics, as well as develop an analysis and risk assessment of hazardous substances.

Merja Saarnilehto, project manager at the Ministry of the Environment, believes that Finland's success in securing funding is partly due to the fact that Finland has been active in the early stages of developing a plastics recovery and circular economy. Finland developed its own national plastics roadmap back in 2018. 

SYKE Institute

Solør Bioenergi in Norway acquires Eidefoss Biovarme AS and Norske Varmeleveranser AS

Solør Bioenergi, through its company Solør Bioenergi Varme AS, has signed an agreement to purchase shares in Eidefoss Biovarme AS from AS Eidefoss. The acquisition includes the district heating plant in Otta, in the municipality of Sel, which supplies renewable biothermal energy to public and private customers in the centre. At the same time, Solør Bioenergi also entered into an agreement to purchase shares in Norske Varmeleveranser AS, which owns and operates a district heating plant in the municipality of Gran, north of Oslo, which supplies approximately 6 GWh of renewable biothermal energy per year. Hans M. Moss, Chairman of Solør Bioenergi Varme AS, says that by acquiring district heating plants in Otta and Gran, Solør Bioenergi has strengthened its investment in the Inland region. In addition, district heating helps to reduce the load on the electricity grid, thereby reducing the need for social investment and releasing large amounts of electricity for more suitable uses than heating, such as charging electric vehicles.

Press Release, Press Release

What we're reading

• Norway open to discussing EU gas price cap, says PM (Financial Times)
• The G7 price cap could make the energy crisis worse  (Financial Times)
• EU plans to cap Russian gas price as Putin issues warning (Al Jazeera)
• EU seeks windfall tax trigger well below market rate  (Financial Times)
• EU governments to struggle with logistics of energy levies (Financial Times)
• Pressure builds for emergency EU action to save metals industry  (Financial Times)
• Countries growing 70% of world's food face 'extreme' heat risk by 2045 (France24)
• Climate change: Sinopec sets green hydrogen goals to help China reach carbon neutrality by 2060 (SCMP)
• How Europe Can Avoid a Deep Freeze (Foreign Affairs)

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