MONTREAL, Sept. 29, 2016 /CNW Telbec/ - Invited at United States International Trade Commission hearings, the Aluminium Association of Canada (AAC) raised the issue of Chinese overcapacity, which is keeping prices artificially low, increasing the deficit in North American production, and boosting global greenhouse gas emissions. The hearings, called by the House of Representatives' Ways and Means Committee, are aimed at identifying conditions for keeping the industry globally competitive at a time when the number of aluminium smelters in the United States has dropped from fourteen to four over a period of only two years.
"China has been increasing its aluminium production despite a shrinking domestic market for the product, and to compensate for this has been boosting exports. This has led to unprecedented consequences on the global market," said Jean Simard, president and CEO of the AAC, who represented the association at the commission hearings in Washington. "Immediate action is required. We must find a lasting solution that addresses the source of the problem."
China's production capacity has developed within a state-directed market in order to meet domestic needs related to rapid urbanization. The Chinese market, now in a situation of overcapacity, must find its internal equilibrium and comply with its own rules, China's international commitments, and international trade rules and practices.
Since China committed itself at COP21 and has repeated numerous times that it would set up a carbon market in 2017, it should take this opportunity to reduce its overcapacity by closing its most obsolete smelters. "In the meantime, all we're doing is trading jobs for GHG emissions," explained Mr. Simard. For example, each ton of aluminium produced in China at its mainly coal-fired smelters emits 17 tons of CO2 - eight times what Canadian smelters emit. "If Canadian production were transferred to China, 51 million more tons of greenhouse gases would be emitted than if it were produced in Quebec," he added.
- Canada produced 2.9 million tons of aluminium in 2015.
- Chinese exported more than 3 million tons during the same period.
- Most of the aluminium produced in Canada is exported to the United States.
- Québec produces 90% of Canada's aluminium.
- This primary industry accounts for 9,000 jobs in Canada.
- With an emission ratio of 2.1 tons of CO2 per ton of aluminium in 2015, Canada's aluminium industry boasts the smallest carbon footprint in the world.
- With an emission ratio of 17 tons of CO2 per ton of aluminium in 2015, China's aluminium industry has the largest carbon footprint in the world.
- Québec's nine smelters account for over 8% of the province's trade balance and contribute $3 billion a year to its economy.
About the Aluminium Association of Canada
The Aluminium Association of Canada (AAC) is a non-profit organization representing three Canadian companies that are among the biggest aluminium producers in the world: Alcoa, Alouette, and Rio Tinto. These three world-class companies operate ten smelters in Canada, nine of which are in Quebec, and employ over 9,000 people. https://aluminium.ca/en/
SOURCE Aluminum Association of Canada
For further information: interviews: Carole Lacroix, Aluminium Association of Canada, 514-288-4842, ext. 221, [email protected]