The closure of Slovak factories will be detrimental, it will not help the global fight against emissions
- Žiarska hlinikáreň is responding to the Minister of the Environment, Budaja, who said last week that it would be better if energy-intensive factories like Slovalco were to be closed.
- According to industrialists, the call for the end of Slovak energy-intensive factories is going against the improvement of the environment worldwide. Their competitors from developing parts of the world have ecologically dirtier factories.
- Slovalco claims that if it stopped producing and its aluminum had to be transported to Slovakia from the developing world, it would emit more than two million tons of CO2 emissions annually worldwide. This would mean the same burden for the planet as if forests were cut down on the area of the entire Bratislava region.
Ján Budaj last week interview for SMEs on large industrial factories, the head of the hardness also on the terms of the statement of the Ministry of the Environment. According to the Minister, it would be better for Slovakia if some domestic energy-intensive factories would rather close.
He specifically mentioned the largest domestic consumer of electricity – the Žalco ironworks. He said that in the end, the country would not lose any significant state budget revenues or more jobs.
Slovalco responded with a press release after the weekend. He claims in it that the Minister’s statements are in fact in conflict with the effort to increase environmental protection worldwide. Because if ecologically cleaner European factories are closed, their products will be transported from much less clean plants in the developing world.
According to Slovalec, the minister ‘s statements also contradict what he himself told their majority shareholder – the Norwegian concern Norsk Hydro – during the recent negotiations on a new model of support for the domestic energy – intensive industry.
“Mr. Budaj assured us that the interest of the Government of the Slovak Republic is to maintain aluminum production in Slovakia,” says Slovalco.
The ministers’ current statements and his long-term expectations that energy-intensive domestic factories will receive larger refunds on the money raised from the sale of emission permits, according to the factory, also indicate that you do not understand how the allowance market actually works.
Depending on the factory or country, the European Commission allows these re-subsidies precisely so that cleaner industrial production does not end in the Union.
The Ministry of the Environment has not yet responded to Denik E’s questions about how you perceive the factory’s criticism.
Today, in a joint position, Minister Budaja was criticized for his statement by the Association of Industrial Unions and Transport, the Association of Employers’ Unions and Associations, the Republican Union of Employers and Club 500, which associates companies with more than 420,000 employees.
“We consider this to be a bleak statement in a situation where the whole developed world is dealing with an enormous rise in energy prices and their impact on industry. Industrial companies expect from the Minister of the Environment, but also from the entire Government of the Slovak Republic to promptly submit measures related to the area, which will address the priority of enrichment contributions from the Environmental Fund of the Slovak Republic, “the unions state work places. in the country.
As the factory argues, it is not so dirty:
- Slovalco calculated that if it were to end and its aluminum would have to be transported to Slovakia from the developing world, then from a global point of view, the annual production of CO2 emissions in the world would increase by about two to a million. According to the factory, this would have a comparable impact on the planet, as if Slovakia had half as many cars as if a forest had been cut down or with the size of the entire Bratislava region.
- This recalculation of the plant is based on the assumption that while it added four tonnes of CO2 per tonne of aluminum after costly greening, aluminum plants outside the EU have an average carbon footprint of 16 to 20 tonnes of CO2 per tonne of metal produced.
- Slovalco further argues that it considers aluminum to be a key raw material in the fight against emissions. It is lighter than other metals, so when used in cars, it reduces their fuel consumption. In addition, aluminum can be recycled indefinitely and is therefore well usable in the circular economy.
- Slovalco also argues that it purchases electricity for its operation only from domestic nuclear power plants and that the electricity produced in this way produces almost no emissions. However, this argument of the factory must be taken with a grain of salt. Ultimately, every Slovak electricity customer receives electricity from the entire mixture of domestic electricity, which so far includes, for example, coal-fired power plants.
How the factory defends its contribution:
- Slovalco claims that, in addition to its own 450 employees, it employs another 2,000 to 2,500 employees of its subcontractors and customers in the Žiar region.
- It contributes around EUR 50 million to public budgets through taxes and levies.
- And it takes home goods and services from Slovak subcontractors every year for about two hundred million euros.
Slovalco: Budaj does not understand what the emission allowances were for
The factory also changed the Minister of the Environment’s remark that the envirofond is not an ATM for industrialists, from which they will always take back as much as you need to improve your economy.
Slovalco opposes that the EU allows countries to return their energy-intensive factories from payments for far more resources than Slovakia actually does.
“We are certainly not asking for any state aid beyond the compensation scheme in force in the EU. The current Slovak compensation of three million euros for the whole sector is definitely not adequate, as it does not cover even three percent of the increased costs. EU compensation of up to 75 percent of increased costs, “says Slovalco, noting that the member states of the Union pay the maximum allowable rate.
However, Slovalco no longer mentions that last year’s only three million compensation of the Slovak government to companies is to increase this year to 36 million euros for energy-intensive factories. The government coalition has already agreed on this change in the Environmental Fund.
In reality, there is no plan for the government to close energy-intensive companies, the discussion is only about the size of compensation. Finally, Minister Budaj admits this in the interview.
“Today, the government could decide not to recommend artificial aid, and companies that are energy eaters will say goodbye to Slovakia and we will simply regret it. So far, there is no such plan and the government, on the contrary, wants to keep these jobs, “he told Sme.
On the other hand, factories are still reluctant if the envirofond reimburses them for the money paid for allowances of EUR 36 million this year. They argue that they pay hundreds of millions of euros a year to it, next year it should be about half a billion.
Budaj: We still store those products
The Minister at some energy-intensive factories is also hampered by the fact that their production is much larger than Slovakia actually consumes. In this context, she mentioned in particular the production of fertilizers from the Dianian town of Duslo, which in turn is the country’s largest consumer of natural gas.
However, restricting factories only for the needs of domestic production would be a business constraint. And just as Slovakia relies only on supplies from abroad for some goods, so other countries are pushing for some Slovak productions.
Let him also blame the factories that their production is finalized in big honey only abroad. He specifically names Slovalco.
“Although the management of the aluminumworks has been entrusted with many plans, they have not yet been able to produce with greater added value. Only from the Slovak Republic, aluminum ingots will be produced, which are in demand in all types of production in the world, and then leave production with high added value to other countries, “he said in an interview with the Minister of SME.
This argument of the Minister may be true, but attracting investors with higher added value is far from just the role of the producer of basic raw materials. Therefore, more can acquire better government with the setting up of the business environment as well as effective investment incentives.