Three priorities stand out.
First, protect what exists
European smelters face structural disadvantages. Energy can account for up to 60% of production costs, yet prices are set globally and cannot be passed through. At the same time, inconsistent grid tariffs and compensation mechanisms distort competition within Europe itself. Reforming grid tariffs, extending compensation for indirect ETS costs, and adopting a coherent approach to energy support are essential to prevent further closures.
Second, create a viable business case for critical minerals
Smelters can supply materials such as germanium and antimony, but doing so requires additional processing investment. At Nyrstar, adding germanium recovery capability would cost around €100 million per site — modest relative to its strategic value. Yet volatile prices and cheaper subsidised supply undermine commercial viability. Targeted tools — long-term offtake agreements, price floors, and public co-investment — are needed to unlock these projects.
Third, invest to modernise and fully utilise existing assets
Smelters can also support the energy system. Electrified plants can adjust production to balance intermittent – and growing – renewable supply. But this flexibility requires investment and market frameworks that reward, rather than penalise, it. With the right support, smelters can strengthen both industrial resilience and energy system stability.
Other nations, notably the United States, are deploying capital and policy support to rebuild capacity that has already been lost. Europe, however, still has the assets, skills and opportunity to lead — not only in securing domestic supply, but in providing processing capacity for allied economies. But time is limited. Smelters do not simply restart once closed: equipment degrades, workforces disperse, and expertise is lost.
Europe must move quickly to secure these strategic assets before they are irreversibly lost.
Originally published on “EIT RawMaterials” on May 7, 2026. Read the original article here.