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Norsk Hydro

Norsk Hydro is a global aluminium and renewable energy company headquartered in Norway.

Lobbying Activity

Norsk Hydro urges fairer EU Taxonomy rules for aluminium

5 Dec 2025
Topic — The European Commission is reviewing the technical screening criteria for the EU Taxonomy.
Message — Hydro requests assessing total carbon footprints for primary aluminium instead of direct emissions. They also advocate for including integrated recycling and simplifying hydropower environmental criteria.12
Why — These adjustments would protect European producers from being unfairly penalized by restrictive labels.3
Impact — Freshwater ecosystems may face lower protection if taxonomy rules match less stringent directives.4
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Meeting with Gerassimos Thomas (Director-General Taxation and Customs Union) and

27 Nov 2025 · Physical meeting - Discussion on upcoming CBAM revision

Hydro calls for EU focus on end-of-life aluminium recycling

6 Nov 2025
Topic — New EU Circular Economy Act on waste management and secondary materials market.
Message — The company requests that recycled content targets focus exclusively on end-of-life aluminium scrap rather than pre-consumer scrap. They want mandatory environmental criteria in public procurement, harmonized waste classification rules, and a 30% export fee on aluminium scrap to prevent outflows to Asia.1234
Why — This would secure their access to aluminium scrap feedstock and reduce competition from Asian buyers.567
Impact — Asian recyclers lose access to European aluminium scrap supplies worth over 1.2 million tonnes annually.89
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Meeting with Wopke Hoekstra (Commissioner) and

28 Oct 2025 · High Level Dialogue with Industry executives on the implementation of CBAM

Meeting with Stéphane Séjourné (Executive Vice-President) and

28 Oct 2025 · High Level Dialogue with Industry executives on the implementation of CBAM.

Meeting with Pascal Arimont (Member of the European Parliament)

16 Oct 2025 · Challenges with aluminium scrap

Meeting with Sabine Weyand (Director-General Trade) and European Aluminium AISBL and

15 Oct 2025 · Situation in the aluminium sector

Norsk Hydro urges competitive electricity prices for aluminium industry

9 Oct 2025
Topic — EU plan to accelerate electrification of energy demand for decarbonization goals.
Message — The company requests prolonged ETS indirect carbon cost compensation beyond 2030 and access to decarbonized electricity at globally competitive prices. They emphasize that aluminium smelting is already fully electrified and further decarbonization requires untested technologies with high capital costs.123
Why — This would reduce their electricity costs which account for 40% of smelting expenses.45
Impact — Other industrial consumers may face higher tariffs as public investment in renewables increases costs.6
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Meeting with Adam Romanowski (Cabinet of Commissioner Maroš Šefčovič)

25 Sept 2025 · Aluminium

Norsk Hydro urges fast-tracked carbon removal credits for EU ETS compliance

22 Sept 2025
Topic — Draft regulation establishing certification methodologies for permanent carbon removal activities including DACCS, BioCCS and biochar.
Message — Hydro requests that certified permanent carbon removals be eligible for EU ETS compliance from 2028, not 2031. They want eligibility broadened to all ETS installations without volume restrictions, and call for public funding to cover both capital and operating costs for high-cost removal technologies.123
Why — This would provide compliance flexibility for residual aluminium emissions and help prevent further industrial closures.456
Impact — Environmental groups lose stricter emissions reduction requirements as industry gains flexibility through carbon removal offsets.7
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Norsk Hydro urges stricter CBAM rules to close scrap loophole

19 Sept 2025
Topic — EU regulation on carbon border adjustment mechanism implementation methodology and carbon price deductions.
Message — Norsk Hydro requests strengthening CBAM methodology to mirror EU ETS by assigning emissions to scrap, excluding indirect emissions for aluminium, keeping electricity rules enforceable, and ensuring third-country carbon price deductions reflect actual effective costs including free allocation and offsets.12
Why — This would protect European aluminium producers from unfair competition and prevent cost disadvantages from scrap-based imports.34
Impact — Third-country aluminium producers lose the ability to avoid carbon costs through scrap imports and offset schemes.56
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Norsk Hydro urges tougher CBAM rules to mirror EU ETS carbon costs

19 Sept 2025
Topic — CBAM implementation rules adjusting certificate obligations for free EU ETS allowances.
Message — Hydro requests strengthening CBAM methodology to close loopholes, assign emissions to scrap, exclude indirect emissions for aluminium, and keep electricity rules enforceable. They argue CBAM must ensure imported goods face the same carbon costs as European production without circumvention incentives.12
Why — This would prevent imported aluminium from avoiding carbon costs European producers pay on scrap and electricity.34
Impact — Third-country aluminium producers lose ability to exploit scrap loopholes and certificate exemptions to avoid CBAM costs.5
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Norsk Hydro urges CBAM reforms to close scrap loophole

19 Sept 2025
Topic — EU regulation on carbon border adjustment mechanism calculation methodology for embedded emissions.
Message — Hydro requests closing loopholes by assigning scrap the same emissions as primary aluminium plus remelting, keeping indirect emissions out of scope for aluminium, and using country-mix emission factors for electricity. They argue the phase-out of free allocation should be reconsidered if CBAM fails to deliver equivalent carbon leakage protection.123
Why — This would eliminate a cost disadvantage exceeding 10 percent for European recyclers by 2035.45
Impact — Third-country aluminium producers lose competitive advantage from zero-emission treatment of scrap-based imports.67
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Norsk Hydro urges flexibility in 2040 climate target to protect European aluminium production

16 Sept 2025
Topic — Amendment to European Climate Law to establish EU 2040 climate target on path to 2050 net-zero.
Message — Hydro requests realistic sectoral decarbonisation pathways, allowing high-integrity international credits from 2031 and a five-year review mechanism starting in 2030 to recalibrate flexibility if competitiveness risks emerge. They want reforms to the ETS Market Stability Reserve to prevent allowance shortages and stronger CBAM protection with export provisions.1234
Why — This would help them maintain European aluminium production and competitiveness despite facing higher costs than international competitors.5678
Impact — Climate ambition suffers as international credits and flexibility mechanisms could delay genuine emissions reductions in Europe.910
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Norsk Hydro urges strong EU carbon cost compensation for aluminium

5 Sept 2025
Topic — Update of EU guidelines on state aid compensating electricity users for ETS costs.
Message — Hydro requests maintaining current protection levels for eligible sectors, ensuring all Member States implement compensation schemes using at least 25% of ETS revenues, and updating CO₂ pass-through factors to reflect that fossil fuels remain marginal price setters. They want legal certainty that 2025 updates apply from 2026 for costs incurred from 2027.1234
Why — This would reduce electricity costs that represent up to 40% of aluminium smelting expenses.567
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Norsk Hydro urges including aluminium in new steel trade tool

18 Aug 2025
Topic — EU consultation on a new trade measure to address global steel overcapacity.
Message — Hydro requests the Commission include the aluminium industry and EEA in the new tool. They claim aluminium faces identical challenges to steel regarding global overcapacity and subsidies.123
Why — Inclusion would shield the company from unfair pricing and aggressive export strategies by subsidized competitors.45
Impact — Major foreign exporters would lose their competitive advantage gained through state subsidies and structural overcapacity.67
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Meeting with Aleksandra Kordecka (Cabinet of Executive Vice-President Stéphane Séjourné), Arthur Corbin (Cabinet of Executive Vice-President Stéphane Séjourné)

10 Jul 2025 · Export of aluminium scrap from EU/EFTA

Norsk Hydro urges EU to prioritize low-carbon aluminium in industrial policy

8 Jul 2025
Topic — EU regulation supporting decarbonisation of energy-intensive industries and creating markets for low-carbon products.
Message — Hydro requests that the EU advance the Single Market where low-carbon aluminium is recognized through transparent criteria and sustainability standards. They call for faster permitting for renewable energy, support for PPAs and CfDs to secure affordable electricity, financial backing for carbon capture technology covering both CAPEX and OPEX, and robust public procurement requirements based on life-cycle emissions.1234
Why — This would drive demand for their renewables-based aluminium and reduce their compliance costs for industrial electricity.56
Impact — Fossil fuel-based aluminium producers in third countries would lose competitive advantage from current labeling approaches.7
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Meeting with Aurel Ciobanu-Dordea (Director Environment)

3 Jul 2025 · Exchange of views on aluminium scrap leakage

Meeting with Mirka Janda (Cabinet of Executive Vice-President Raffaele Fitto)

24 Jun 2025 · Role of funds in supporting strategic industrial projects under the European Green Deal

Meeting with Kerstin Jorna (Director-General Internal Market, Industry, Entrepreneurship and SMEs)

5 Jun 2025 · Challenges and opportunities for EU aluminium producers

Meeting with Gerassimos Thomas (Director-General Taxation and Customs Union) and

16 May 2025 · Physical meeting - Exchange of views on the Carbon Border Adjustment Mechanism (CBAM)

Meeting with Thomas Le Vaillant (Acting Head of Unit Trade)

6 May 2025 · Impact of CBAM on aluminium industry

Meeting with Thomas Le Vaillant (Acting Head of Unit Trade)

6 May 2025 · Hydro delivered a presentation on the impact it expects of CBAM on the aluminium industry.

Meeting with Alexandra Mehnert (Member of the European Parliament, Rapporteur for opinion)

14 Apr 2025 · ELVR

Aluminium producer Norsk Hydro backs simpler EU green reporting

25 Mar 2025
Topic — The EU initiative aims to make sustainability reporting simpler and more cost-effective.
Message — Hydro supports a 10% materiality threshold and voluntary reporting for operational expenditures. They also recommend using a risk-based approach for pollution control criteria.123
Why — Hydro would reduce its compliance costs and avoid complex chemical auditing requirements.45
Impact — Transparency advocates lose access to mandatory data regarding corporate operational spending and hazards.67
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Meeting with Valdis Dombrovskis (Commissioner) and

4 Mar 2025 · Competitiveness and Simplification

Meeting with Ana Vasconcelos (Member of the European Parliament)

20 Feb 2025 · Introductory meeting

Meeting with Pascal Arimont (Member of the European Parliament) and Alcoa Nederland and Sandbag Climate Campaign

4 Feb 2025 · CBAM and the aluminium sector

Meeting with Jessika Roswall (Commissioner) and

3 Feb 2025 · Carbon Adjustment Mechanism and Circular Economy Act

Meeting with Peter Van Kemseke (Cabinet of President Ursula von der Leyen) and Alcoa Nederland

3 Feb 2025 · on CID

Meeting with Jens Gieseke (Member of the European Parliament) and EPIA SolarPower Europe

22 Jan 2025 · Austausch zu EU Politik

Meeting with Pascal Arimont (Member of the European Parliament)

22 Jan 2025 · Making CBAM Work for Aluminium

Meeting with Dan Dionisie (Head of Unit Justice and Consumers)

20 Jan 2025 · Meeting with Norsk Hydro

Meeting with Svenja Hahn (Member of the European Parliament)

9 Dec 2024 · INTA priorities, situation for aluminum industry in Europe

Meeting with Pascal Canfin (Member of the European Parliament, Shadow rapporteur)

18 Nov 2024 · End-of-life of vehicles

Meeting with Pascal Arimont (Member of the European Parliament)

28 Jun 2024 · Loopholes in CBAM

Meeting with Gerassimos Thomas (Director-General Taxation and Customs Union)

21 Mar 2024 · Physical meeting - CBAM and its implications for the aluminium sector

Hydro Advocates for De-risking Rules in Renewable Energy Auctions

28 Feb 2024
Topic — New EU guidelines for Member States on designing renewable energy auction criteria.
Message — Hydro calls for clear, objective auction criteria and reduced developer risks. They prefer auction models allowing direct power purchase agreements with industrial consumers.12
Why — Predictable energy costs would protect Hydro's global industrial competitiveness.34
Impact — Consumers face higher energy costs if auctions result in project non-execution.56
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Meeting with Mohammed Chahim (Member of the European Parliament, Rapporteur)

22 Jan 2024 · CBAM

Norsk Hydro urges separate ETS benchmarks for alumina and aluminium recycling

22 Dec 2023
Topic — EU rules for free allocation of emission allowances under revised ETS.
Message — Hydro requests separate product benchmarks for alumina refining and aluminium recycling, exclusion of COVID-19 and energy crisis years from historical activity calculations, and amendments to ensure free allocation phase-out matches CBAM implementation. They also seek clearer reporting requirements and protection for heat recovery projects.1234
Why — This would protect their aluminium recycling operations from artificially low free allocations and reduce carbon costs.567
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Meeting with Morten Petersen (Member of the European Parliament)

11 Oct 2023 · Ongoing Parliamentary work related to upscaling Europe’s Offshore Wind Sector

Norsk Hydro seeks simpler EU sustainability reporting standards

7 Jul 2023
Topic — The EU is defining mandatory sustainability reporting standards for large companies.
Message — Hydro requests more voluntary disclosure requirements and detailed guidance for materiality analysis. They urge further simplifications and alignment with international standards to avoid fragmentation.123
Why — These changes would reduce reporting costs and ease the technical implementation burden.45
Impact — Environmental groups may receive less information if biodiversity reporting remains voluntary.6
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Meeting with Niels Fuglsang (Member of the European Parliament, Shadow rapporteur for opinion)

5 Jul 2023 · (APA) Critical raw materials

Meeting with Cristian-Silviu Buşoi (Member of the European Parliament) and Veolia Environnement and Business Bridge Europe

6 Jun 2023 · speaker at the 3rd European Energreendeal Conference

Meeting with Mauri Pekkarinen (Member of the European Parliament)

9 May 2023 · Meeting on Critical Raw Materials Act

Meeting with Ville Niinistö (Member of the European Parliament)

27 Apr 2023 · Carbon removals (staff level)

Meeting with Mohammed Chahim (Member of the European Parliament, Shadow rapporteur)

25 Apr 2023 · CRMA

Meeting with Stefanie Hiesinger (Cabinet of Executive Vice-President Frans Timmermans)

15 Mar 2023 · Presentation and discussion on Hydro’s decarbonisation strategy

Meeting with Valdis Dombrovskis (Executive Vice-President) and BUSINESSEUROPE and

16 Feb 2023 · Critical Raw Materials package

Meeting with Joan Canton (Cabinet of Commissioner Thierry Breton)

9 Feb 2023 · Exchange on energy crisis and its consequences, as well as preparation of critical raw materials act

Meeting with Mairead McGuinness (Commissioner) and

10 Jan 2023 · Taxonomy, ESG ratings, CSRD

Meeting with Peter Liese (Member of the European Parliament, Rapporteur) and BUSINESSEUROPE and

20 Dec 2022 · ETS

Response to European Critical Raw Materials Act

23 Nov 2022

Hydro is a global industrial company with operations in 40 countries and 30,000 employees. Hydro is the largest European aluminium company in addition to being a significant renewable power producer in Norway. Hydro is also developing battery materials and hydrogen businesses. Hydro is an active shareholder in: (1) Hydrovolt. A joint venture with Northvolt recycling EV batteries; (2) Vianode. A joint venture with Elkem and Altor Equity Partners producing synthetic graphite. Hydro has the following recommendations concerning the upcoming Critical Raw Materials (CRM) Act: 1. The CRM List needs to be completely redesigned to account for the Twin Transitions policy objectives and must be forward-looking: Move from Critical to Strategic. The list of criteria needs to include materials contributions to the green transition, carbon leakage risk and foreseen future supply gaps. We would imagine that battery materials would be maintained on the list, along addition of metals such as aluminium, copper and nickel. At the same time, we believe that nomenclature is a secondary issue, so there is no need to rename the list, unless found important as a symbolic step forward. 2. The revamped CRM List should be the basis for prioritization of public funding for projects. 3. Objectives of the CRM List 2.0: Focus on substitution only when most rational, for example in case of mined natural graphite vs. synthetic graphite to ensure buy-in from raw materials producers. 4. Hydro proposes that the CRM Act be drafted with the following principles in mind: 4.1. Focus on both new and existing operations rather just on new investments 4.2. Focus on the whole value chain, not only mining 4.3. Having both offensive and defensive interests in mind (for example, shielding raw materials producers from unfair trade) 4.4. Holistic policy approach: Energy, sustainability, international trade, innovation. We would like to kindly request the European Commission to propose measures/ actions/ new approaches to the European energy, sustainability, trade and innovation policies, which would be all aimed at strengthening raw materials production in Europe. In many cases, it is not about changing the letter of the law but rather changing the institutional mindset (for example, react faster in case of unfair trade practices) and mainstreaming the principles (for example, policy coherence, traceability, support to green demand). 4.5. Have Norway in mind as an EEA member, a like-minded country and an important supplier of raw materials to Europe. 5. Symbolic stretch targets. A headline target of 25% mining, 50% refining/smelting, 75% recycling to strengthen the weight of the CRM Act 6. Public funding: 6.1. Hydro welcomes the proposal to use Important Projects of Common European Interest in case of raw materials. However, the employment of this mechanism needs improvements. For example, a way needs to be developed to be able to join an IPCEI after state aid to a project cluster is approved. The criteria for support and their respective level of priority in the decision process should be made clearer, and the application process should be made as lean and fast as possible. 6.2. More clarity on public funding opportunities needed. While this challenge is relevant also to other sectors, it would be very helpful to raw materials producers if the EU established an easy-to-navigate database on public funding. 6.3. Hydro believes that state aid mechanisms in the EU could benefit from being inspired by the U.S. Inflation Reduction Act mechanisms. IRA support distribution is much more mechanical and incentive-based than EU state aid, which is very uncertain till the moment of obtaining final approval.
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Meeting with Pernille Weiss-Ehler (Member of the European Parliament, Rapporteur)

21 Jun 2022 · Waste Shipment Regulation

Meeting with Jytte Guteland (Member of the European Parliament) and European Heat Pump Association and Nordic Logistics Association

28 Apr 2022 · ETS revision

Meeting with Cyrus Engerer (Member of the European Parliament)

15 Feb 2022 · Market Stability Reserve

Meeting with Nils Torvalds (Member of the European Parliament)

7 Feb 2022 · Zero aluminium and CBAM

Meeting with Cyrus Engerer (Member of the European Parliament)

29 Dec 2021 · Market Stability Reserve

Aluminium producer Hydro warns against weakening carbon leakage protections

8 Nov 2021
Topic — Revision of EU Emissions Trading System to achieve 55% emissions reduction by 2030.
Message — Hydro requests maintaining full free allocation until carbon border adjustment mechanism proves effective, flexible market stability reserve rules, and new compliance instruments for hard-to-abate sectors. They oppose simultaneous rebasing, higher linear reduction factor, and increased market stability reserve intake.123
Why — This would protect them from increased compliance costs and international competition during decarbonization.45
Impact — Climate ambition suffers as slower carbon price increases and continued free allocation delay emissions reductions.67
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Response to Modernising the EU’s batteries legislation

1 Mar 2021

Hydro welcomes the proposal from the Commission for a European battery regulation and in general supports the improvements of sustainability and transparency of the battery value chain. Key messages: • Targets and timelines should be ambitious, but realistic and achievable. • Sufficient stakeholder involvement in developing delegated acts is crucial so that the understanding of the developments of the industry is ensured and adequate calculation methodologies adopted. • Quality of declarations regarding imported batteries must be ensured. • The regulation must be coherent with, and should not duplicate, other pieces of legislation relevant to batteries (chemical policy, due diligence and sustainable governance, end-of-life vehicles, etc.). • Hydro strongly supports the supply chain due diligence policy, based on a risk-based approach (especially at companies with multiple business streams), definitions aligned with international standards (OECD, UNGP), recognition of third-party schemes. Annual reporting must at a minimum be aligned with extra-financial reporting requirements. • Annual reporting must at a minimum be aligned with extra-financial reporting requirements. • The LCA analysis tool should enable using primary data throughout the value chain. • Principles for calculating CO2 emissions from electricity sourcing should be included in Annex II, stating that renewable electricity is only accounted for in the life cycle assessment if sound evidence of sourcing it is provided, avoiding the use of offset mechanisms without a physical link between the renewable power production and the consumer. • Material recovery targets should be realistic, and rates should be calculated from the final process step where “battery grade” is obtained from the recovered materials. • Performance declaration should be set primarily as information and labeling requirements. • The regulation should not duplicate requirements already established in international criteria (such as UNECE). • The Battery Passport must include critical information to recyclers without intruding on IP. • Clearer requirements on safety testing, the responsibilities regarding collection, achievement of recycling targets, second life of batteries are needed.
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Response to Revision of the Energy and Environmental Aid Guidelines (EEAG)

10 Dec 2020

Please find attached contribution from Norsk Hydro, aluminium producer.
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Response to Updating the EU Emissions Trading System

26 Nov 2020

Please find enclosed feedback from Norsk Hydro, aluminium producer. Summary of our contribution: By increasing the climate target to 55% GHG emission reduction, the EU is taking a considerably stronger leading role on climate action on the global scene. For industries competing globally, as aluminium, the higher ambition creates higher operational costs, leading to additional competitiveness concerns. Such extra costs cannot be passed on to customers, without losing significant market shares. Also, these extra costs weaken industries’ financial capacity to invest in low-carbon untested technologies and undermine our international competitiveness in this important transition period. We support the higher climate target, but our support is conditional to implementing effective and improved measures to protect European industries from the increasing risk of carbon leakage. This is of vital importance in an uneven carbon constrained world. The upcoming ETS revision should take this situation into account thoroughly. Further, it is important to establish flexibilities within the EU ETS to ensure that economic growth can take place within the cap. Based on these considerations, we call on the ETS revision to ensure adequate carbon leakage protection measures to the best performing installations, and to provide enough flexibilities within the ETS to allow for economic growth. In this context, existing measures such as the free EU ETS allowances and indirect cost compensation should remain in place and be strengthened. Please find attached our comments to the IIA.
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Response to Sustainable Products Initiative

16 Nov 2020

Hydro is an aluminium producer, with activities in the entire value chain. We welcome the Sustainable Product Policy Initiative (SPPI) and strongly supports initiatives aiming at driving demand towards low-carbon and circular products. We support establishing sustainability principles and common criteria, as well as improve and make available reliable information on sustainability. Transparent and reliable sustainability information along the value chains are key to enhance companies’ offer of greener products and to enable consumers to choose products with the lowest carbon footprint. Please find attached our recommendations to the Sustainable Products Initiative.
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Response to Environmental claims based on environmental footprint methods

31 Aug 2020

Please find Hydro's contribution attached
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Meeting with Thierry Breton (Commissioner) and

18 Jun 2020 · Impacts of COVID-19

Meeting with Kim Jorgensen (Cabinet of Executive Vice-President Margrethe Vestager)

5 Jun 2020 · To discuss aluminium in Europe

Response to Climate change mitigation and adaptation taxonomy

20 Apr 2020

Please find attached feedback from Hydro, aluminium producer.
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Response to 2030 Climate Target Plan

15 Apr 2020

Please find attached contribution from Hydro, global aluminium company, present in 22 European countries, with more than 35.000 employees worldwide.
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Response to Revision of the Energy Tax Directive

1 Apr 2020

Please find attached the contribution from Hydro, aluminium producer.
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Response to Carbon Border Adjustment Mechanism

1 Apr 2020

Hydro is a global aluminium company, present in 20 EU/EEA countries, with more than 21.000 employees in Europe and 35.000 globally. Please find attached our contribution. Key messages : Hydro strongly support the importance of preserving the competitiveness of European industries, which is rightly recognized in the Inception impact assessment (IIA) for a carbon border adjustment mechanism (CBAM). However, the IIA also states that CBAM should be an alternative to existing carbon leakage measures. • For aluminium, we disagree that CBAM could be an adequate alternative carbon leakage measure. For our industry, it is of outmost importance that existing measures currently addressing the carbon leakage risk are maintained. • Replacing free allowances and CO2 compensation with a CBAM would have severe effects on the entire European aluminium value chain and its customers. • Our position is therefore that CBAM should not be introduced as an alternative carbon leakage measure for aluminium. • However, if a CBAM is considered to be introduced for aluminium, it should not replace current carbon leakage measure. Rather, it should be a tool to differentiate on carbon content of products, and it is essential that it would be correctly designed to avoid negative consequences for the aluminium value chain. Please find more information attached.
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Aluminium producer Hydro demands industrial safeguards for Climate Law

6 Feb 2020
Topic — Legislation enshrining the 2050 climate neutrality objective into European Union law.
Message — Hydro supports climate neutrality provided the EU safeguards industrial competitiveness through protective measures. They request public grants and improved carbon leakage mitigation for energy-intensive sectors.123
Why — These measures would preserve Hydro's financial strength and offset the costs of decarbonization.4
Impact — Non-industrial sectors would face a higher burden to equalize carbon reduction efforts.5
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Norsk Hydro demands flexible thresholds for industrial carbon allowances

9 Jul 2019
Topic — Updating the implementing legislation for free allocation rules in the EU Emissions Trading System.
Message — Hydro requests an absolute quantitative threshold of 50 000 tCO2 to protect large installations. They also want linear allocation adjustments to production changes. Hydro calls for mandatory reporting on activity level shifts.123
Why — This would prevent high costs for large sub-installations and protect efficient aluminum productivity projects.456
Impact — Opportunistic companies attempting to exploit production adjustment loopholes would lose the ability to manipulate allocations.78
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Meeting with Mauro Raffaele Petriccione (Director-General Climate Action)

11 Mar 2019 · Discussion on low-carbon transition

Response to Revision of the ETS State aid Guidelines

17 Jan 2019

Hydro is a global aluminium supplier with activities throughout the entire value chain, present in 23 European countries and with 35,000 employees globally. We welcome the review of the State Aid Guidelines for ETS indirect costs. Industries where product prices are set globally cannot pass on increases in electricity prices, due to the ETS, into their product prices. Electricity is a major cost factor for the most electro intensive industries such as aluminium, representing around 40% of production costs. Hence, this industry is particularly exposed to carbon leakage due to indirect costs, and adequate compensation in Phase IV is of high importance. If a Member State choose not to compensate, this will not distort the internal market, but will lead to increased imports from outside the EU, rather than production increase in a compensating MS. However, full compensation on direct emission (free allowances) and only partial of indirect costs creates market distortion between carbon intensive industries and electro-intensive industries, such as aluminium. Eligibility: Industries where product prices are set globally (price-taker industries) and electricity cost is a major factor, should be eligible. Amount of compensation: The proportionality of the aid needed to achieve the environmental objectives (prevent carbon leakage) vary greatly between eligible sectors depending on the magnitude of indirect costs. No undertakings should be put in an international competitive disadvantage. For eligible sectors, the percentage of indirect cost compensated should be at least 85% and should remain stable over the entire trading period. In addition, as noted by the EC roadmap, specific rules for those undertakings where indirect costs are particularly burdensome, must be introduced. Therefore, a method building upon the approach laid out in the Commission’s EEAG 2014-2020 for alleviation from renewables levies [paragraphs 188-189], would better cater for the objectives for the aid. Electricity market prices are increased by ETS costs of the price setting technology in the respective markets (Cfr EC Energy prices and costs in Europe report 2019, p.12). Even in markets heavily based on renewable or nuclear energy, the ETS cost to the price setting technology in the merit order increases the market price, regardless of the average generation mix. Eg the Nordic market with large share of non-emitting generation (nuclear, hydro with reservoirs and intermittent renewables) is strongly impacted by ETS through the marginal producers and interconnectors to neighboring markets with thermal generation. An increasing share of intermittent generation means that the thermal power share declines, however the thermal power influence on prices will not diminish accordingly. In most period renewables cannot cover all demand and thermal power will remain the marginal technology to clear the market. To avoid under/ over-compensation, the applied pass-through factor (i.e. the influence of CO2 costs on power prices) should be as accurate as possible. To achieve this, we strongly recommend applying a pass-through factor based on marginal price-setting principles, using power market models with an accurate representation of all European markets. To reflect power market dynamics, calculations of pass-through factors should be done at prespecified intervals, e.g every five years. Power market modelling will also reveal degree of bottlenecks between power markets. - CO2 price: Current CO2 price definition (EU forward price for the year t during the year t-1) should continue. - Activity level: Compensation should be based on previous year’s production data (no coordination on EU level as for free allowances). This will avoid overcompensation, which seems unreasonable in state aid cases and provide incentives for the industries growth investments. - Benchmarks should be updated and based on actual data for the 10% best performers.
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Norsk Hydro urges broader cost definitions for Innovation Fund

11 Jan 2019
Topic — Establishing the functioning of the ETS Innovation Fund for Phase 4 climate action.
Message — Hydro asks to include R&D and risk factors in the definition of relevant costs. They also seek a clear definition of conventional production.12
Why — This would reduce the financial burden of high-risk research and demonstration projects.3
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Norsk Hydro seeks more precise aluminium carbon reporting rules

26 Nov 2018
Topic — The European Commission is updating rules for monitoring and reporting industrial greenhouse gas emissions.
Message — Hydro wants the regulation to explicitly include carbon emissions from electrode consumption during electrolysis. They recommend requiring separate mass balances for electrode production and consumption to match international standards.12
Why — Uniform monitoring requirements would provide greater regulatory certainty and prevent misinterpretation by national authorities.3
Impact — Companies currently using simplified reporting methods would face more rigid accounting requirements.4
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Norsk Hydro urges more flexible emission allowance allocation rules

23 Nov 2018
Topic — Establishing rules for the free allocation of emission allowances under EU ETS.
Message — Hydro requests flexible options for calculating activity levels, including medians or top production years. They want allowance adjustments for investments even if growth is under fifteen percent. Clearer definitions are sought to ensure consistent enforcement across the EU.123
Why — This would prevent the company from being penalized for production dips during maintenance or crises.45
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Meeting with Dominique Ristori (Director-General Energy)

25 Sept 2018 · the future energy use of green European industry & aluminium for the low-carbon transition

Response to Institutional investors' and asset managers' duties regarding sustainability

23 Aug 2018

Norsk Hydro welcomes the initiatives and legislative proposals aimed at a more coordinated approach to ESG factors in the finance sector. More transparency and harmonization of sustainability evaluations in investments can be a contributor for driving the EU towards a low-carbon economy. Norsk Hydro is the largest aluminium producer in Europe, and a large hydropower producer in Norway, hence representing two sectors that will be crucial in driving the development towards emission levels in line with the Paris agreement. We appreciate the opportuntiy to provide our feedback to the legislative proposals, and attach our feedback on the proposals for regulations on framework to facilitate sustainable investment and the regulation on low carbon and positive carbon impact benchmarks. Our feedback summarized: We perceive that the Commission proposal for regulation on sustainable investment covers the topics that are relevant in a broad sustainability perspective. We note that the outline of the framework suggests a very high degree of complexity, and a high number of factors to evaluate per economic activity. For all criteria there could be several possibilities for concretization, which might give different results. The upcoming work on defining criteria will therefore be of outmost importance, and we have the following recommendations: - methodology evaluating GHG-emissions in the sustainability criteria and in the carbon benchmarks should be harmonized -Measuring sustainability of a company/economic activity should be based on a sector treshold. This will ensure that good performers within each sectors are targeted. - Individual companies are involved in different parts of the value chain withing a sector. Hence for sustainability evaluations to be meaningful across companies, performance should not only be evaluated by company, but per process step in the production cycle. -The whole life cycle of a material should be considered when measuring sustainability. Recycling is an important part of a circular economy and contributor to lower CO2-emissions. To target actual recycling rates, criteria should aim at recycling rates for post-consumer scrap and not include process scrap. -criteria for sustainability should be based on actual physical improvements and performance, and not use of financial/tradable mechanisms. For the low-carbon and positive carbon benchmarks, we would like to highlight the following: - When setting a carbon benchmark, emissions need to be paired with a factor. For industrial companies this should be the product produced (for metals: emissions per tonne product), and not measured against GVA, turnover etc, which will make the index reliant on external economic factors. - Rather than a sectoral approach, a thorough analysis of individual companies is necessary to make an index. - Contribution to reducing emissions in other sectors in the user phase of a product should be included in carbon indexes. This will help favoring not only companies with lower emissions in production phase, but also companies that facilitate lower emissions in other sectors. Reduced emissions due to use of a product is the basis for the concept "avoided emissions". -Scope 1 and 2 emissions are highly relevant for energy intensive industry. Scope 3 emissions are however only a small part of total emissions, and complex to calculate. Hence including Scope 3 for industry might bring an administrative burden without adding value to the index. It is important that carbon indexes give incentives for companies to address the most important emissions sources.
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Norsk Hydro Urges Dynamic ETS Allocation to Support Growth

17 Apr 2018
Topic — Revision of rules for determining free carbon allowances for industrial installations until 2030.
Message — Hydro proposes using the three highest production years to calculate baseline activity levels. They advocate for annual updates without time lags to reflect actual production growth. They also request lower thresholds for reporting incremental increases in aluminium production.123
Why — This would allow the company to receive more free allowances for small efficiency-driven production gains.45
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Response to Carbon Leakage List 2021 - 2030

13 Nov 2017

Norsk Hydro is a global supplier of aluminium with activities throughout the value chain, from bauxite extraction to the production of rolled and extruded products as well as recycling. With 35,000 employees globally, and operations all around Europe, Hydro has large production units exposed to carbon leakage in EU/EEA countries. Reinforcing the competitiveness of European industry and securing international competitiveness is of paramount importance to avoid carbon leakage. To improve competitiveness the industry must regularly upgrade installation and/or invest in new plants with a at least 10-20 years’ time horizon. The carbon leakage risk is related to the net cost risk exposure for the entire value chain in the future, and not based on current CO2 prices. Therefore, studies evaluating historical carbon leakage risk cannot be used to describe the future risk. Hydro would like to comment on Section B, parameters 1) Emissions intensity and 2) Trade intensity of the IIA: 1) Emissions intensity and emission factor for electricity Current methodology for defining emission intensity for the CL list includes direct and indirect emission costs with equal emphasis on the two cost elements. As today, we agree that both direct and indirect should be included with equal emphasis when establishing the sectors exposure to EU carbon costs. The methodology for the CL list to define the indirect emissions is founded on the average emission of the European electricity generation. However, the emission factor for electricity price is not set by the European average generation mix. In the European electricity market, prices are decided by the marginal technology in each regional market in Europe, thus, regional and not average emission factors, based on marginal pricing mechanisms, are the correct methodology. For compensation of indirect CO2-costs, regulated by the current State Aid guidelines for indirect compensation, the passthrough of the CO2-price to the electricity prices is correctly based on the regional emission factor. The new State Aid guidelines for CO2 indirect costs compensation in electricity prices, including the list of eligible industries, should be based on the principles of marginal technology as in the current Guidelines. Notably, even though a higher share of renewable energy is being introduced, the marginal producer, hence price setter in the electricity market, will - in a 2030 perspective - still be mostly a producer of fossil-sourced electricity. Therefore, electricity prices will be affected by CO2-prices for the next decade. 2) Trade intensity with third countries Exposure to international competition, including possibilities to passthrough EU carbon costs on product prices, is what determine the ability for the industry to grow in Europe. Trade intensity with third countries can be a good proxy for some industries, however for commodities where the prices are set globally, (e.g. aluminium prices, set at the London Metal Exchange (LME)), European producers cannot pass through any European carbon costs. Therefore, when prices are set globally, and the European production’s share is globally relatively low, European producers are price-takers, and the trade intensity should be set at the highest level (100%). International efforts of establishing carbon cost schemes Currently there are numerous international climate efforts. When evaluating how such international efforts impact the carbon leakage risk, it should be considered how the system in each country/ region is designed, and how the industry is impacted and protected. If and how the electricity prices to industry are affected and compensated should also be considered. Furthermore, this is necessary with sectoral comparisons, i.e. consider countries that are relevant in the product markets for the different industrial sectors on the CL list. Therefore, it is the cost after compensation, that is relevant to evaluate.
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Meeting with Daniel Calleja Crespo (Director-General Environment)

7 Sept 2016 · Circular Economy and Recycling

Meeting with Christian Linder (Cabinet of Vice-President Maroš Šefčovič), Juraj Nociar (Cabinet of Vice-President Maroš Šefčovič) and European Aluminium AISBL

23 Feb 2016 · Energy Union; Aluminium Industry

Meeting with Miguel Arias Cañete (Commissioner) and

18 Aug 2015 · Contribution of Norsk Hydro to climate policy objectives