Suits and Boots | The Sustainable Business Podcast

Eurometaux: Charging Ahead | Circular Policy Pathways for Europe’s Energy Transition

• Season 1 • Episode 18

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The conversation focuses on how to accelerate the clean energy transition from a policy perspective and promote a circular economy in Europe — with particular attention to key challenges and strategies.

Speakers on this episode:

  • James  Watson | Director General - Eurometaux
  • Assheton Stewart Carter | Executive Chair & Founder - TDi Sustainability
Assheton Carter:

Hello and welcome to this edition of Suits and Boots, the TDI podcast series. I'm Ashton Stewart Carter, Executive Chair at TDI Sustainability, and your host for today. In this episode, we're diving into a critical topic at the intersection of industry, policy, and sustainability in Europe. How can Europe accelerate the clean energy transition from a policy perspective while also promoting a truly circular economy? We'll explore the challenges, opportunities, and strategic pathways that lie ahead as the EU seeks to secure its green industrial future. I'm delighted today to be joined by a highly influential leader in this space, James Watson, who is Director General of Eurometaux. Eurometaux is an umbrella association representing the interests of the combined EU non-ferrous metals industry towards EU policy makers. James joined Eurometaux in 2024, bringing more than 25 years of experience in policy and advocacy. Prior to this role, James was Secretary General of Eurogas, where he led the European Gas Industry Association for five years. And James is also previously CEO of Solar Power Europe, the European Solar Industry Association, and worked as director of public affairs at Weber Shandwick, specializing in energy and trade policy. Welcome, James, and thank you for joining us today. Together we'll be discussing what it will take for Europe to meet its ambitious climate goals with without compromising industrial competitiveness, supply security, and innovation. Let's get started.

James Watson:

Hi, Ashton. It's great to be here. Thanks for the invite.

Assheton Carter:

So I'm a Financial Times reader, and the articles on energy, industrial, and critical minerals policies and markets I was reading two years ago, or even a year ago, compared to this week, appear to be worlds apart. But then, in the not too distant past, really, a couple of years ago, the tone of articles on the demand for critical minerals driven by policy commitments to green energy, green infrastructure, and electrication economy, wind, solar, something you covered before in your previous uh life, incentives to buy EVs and for greener air travel were, if not optimistic, at least positive. Today, however, the atmosphere is very different, I feel. The headlines this week in the FT are, if not pessimistic, rather negative. If that is, if your objective is green and more sustainable industries and supply chains. There's an article on aerospace, for example, which is headed How Politicians and Customers Gave Up on Greener Air Travel. And the CEO of Ryanair, Michael O'Leary, was quoting that saying, the green agenda is dead. Electrical vehicles. There's another article there saying why car makers are falling back in love with petrol. Um, this morning there's an announcement from Orsted that they're uh laying off quarter of their workforce on the back of pausing projects in Europe and abandoning other projects in the USA. Then even more articles saying how China has won the race on renewables, the dominance of Chinese renewables, EVs, batteries, and solar, while reminiscing about the failure of some European battery companies like North Vault and British Vault and central panel makers like Northern Crystal. And yet more articles on the effect of trade wars between economic rivals, mostly between the USA and China. China again imposing even more restrictions on exports of products with rare earths. But now the block, the EU bloc, has also joined the tariff gamers in imposing or is threatening to impose 50% tariffs on steel. And at the same time, the FT is publishing articles and even op eds from European leaders who are calling for less constrained uh growth, specifically calling for a dismantling or watering down, some would say, of regulations, including those regulations on environmental and human rights, uh, that are perceived to perceive to be overly burdensome and hindering European competitiveness. And of course, the Draghi report earlier this year really, I think, talked to what he sees as being an imperative, which is to do what it takes for the European Union and its member states to remain competitive. So to be a little provocative, if you were to construct history by media headlines, you could say that things look a little bleak for the European Green Deal and its circularity ambitions. And some would say that's even assessment, that would be somewhere between a um a euphemism and an understatement. Is the impulse to remain competitive and retain markets going to come at the cost of European sustainability ambitions, which really has been a core value of Europe, one for which Brussels has become well known? That book, The Brussels Effect, talked about how Europe was becoming the global policeman, especially on these sustainability issues. But we shouldn't construct a history of news headlines, facts are better. And James, you're in a perfect position to inform listeners what is the actual situation. So can we begin with a quick overview? What do you see as being the current status of Europe's clean energy transition ambitions? And where is it falling short and where does it look like it's heading?

James Watson:

Most of the policymakers in the European Commission are quite determined to see through the so-called Green Deal, which was set up by Yasma von der Leyen back in 2019-2020, uh, to try and drive competitiveness through uh the energy transition, through environmental policy, uh that this would be the defining factor for Europe's success in its industries, uh, you know, having a green premium for our steel, our aluminium, and other uh commodities to show that we are leading the way in decarbonizing but maintaining our economic ability. Perhaps the people are seeing things a little bit differently, though. Uh you look at the European Parliament, uh, we see quite a strong minority, nevertheless, minority, uh, in the far right groups now who question very much uh whether or not we should have a Green Deal at all. And this creates a dilemma for those on the centre right as to whether they should vote with them or with the other centrist parties to get laws made. We saw very recently on things like corporate reporting, uh corporate reporting sustainability directive and the uh due diligence directive, where the centre right had the dilemma of whether or not to vote with the centre left and the other centrists ought to go towards the far right to get what they want. This, of course, is a danger uh to the the Green Deal. Uh, but again, that is driven by uh people's voice voice and people's choice in the uh in the in the ballot box, I think, Ashton. And that's that's our reality. And then again, why are we seeing this uh slow down in things like the deployments of offshore wind? We can talk about permitting, but actually permitting is really being speeded up, and a lot of effort has been made uh to allow better uh deployments of offshore wind. One of the main problems that we face is that things like the levelized cost of electricity from offshore wind is going up. And actually, if you remember, there were always the graphs which just showed that renewables would get cheaper and cheaper and cheaper over time. What they didn't factor in were things like bottlenecks, availability of resources and materials to actually develop offshore wind. And let's be honest, the prices of many commodities are increasing. Look at copper globally, the price is going up. Gold, the price has gone up considerably. Okay, it may not have a direct impact on some technologies, but you have to look at these commodities and say, okay, the commodities that we need are becoming more expensive. And so, of course, you cannot have ever decreasing costs of electricity produced from renewables if the costs of the components that go into them are increasing. It's just, it's almost impossible to imagine to do that. And then you also have the so-called weighted average cost of capital. And I think as we see offshore deployment in wind stagnating, this reduces investor confidence. This is where investors probably do read too many headlines, Ashton, and do start thinking about, well, we're God, well, is this going to be a safe investment or not? And then that leads to an automatic vicious circle where people are not investing in the technology they ought to be investing in because they're worried about their rate of return. And that means that the cost of borrowing goes up. So that's what the weighted average cost of capital is. The weight of the the cost of borrowing goes up. That also then makes offshore wind more expensive, which is you get stuck in that vicious circle. So I think that when we look at it, we can say this, there are struggles. But on the other side, there are a lot of initiatives underway. Uh the European Investment Bank is taking this to task, is looking for ways to uh invest more in the whole value chain of wind, uh, to look at investing in the whole value chain of critical raw materials. They've just recently awarded grants to uh copper smelter in Bulgaria, uh, secondary copper smelter in Hamburg. So the EIB is also stepping in and saying, okay, we will also support the green transition, and we will find money and we will be able to give this uh on good terms uh to projects we feel that are viable. And so if the private sector becomes less convinced, there is always the public policy element that you can't under undermine or deny. And as I say, the European Commission is still very committed to its Green Deal, especially around competitiveness put everywhere. They still fundamentally believe in it. And I think that that actually is one of the reasons why we still see a strong belief that public institutions like the European Investment Bank should invest. It's not that it's easy globally. Uh, we see the United States, of course, the United States is uh taking a totally different view now. It's going all back to gas and oil. The Biden administration was also very pro uh developing. You know, we had the Inflation Reduction Act, we're going to develop hydrogen, we're going to develop lots of our own technologies to deal with the energy transition. And that's obviously not the Trump administration's priority. Uh and then you also see in Europe we commit ourselves to $750 billion worth of uh US LNG. So we could say that there are a lot of headwinds. There are strong headwinds that are coming into this conversation globally from the investor community, from some parts of the political spectrum. But I think that overall we are able to say that there is still an energy transition that is taking place. Maybe it's going a little bit slower than it was five years ago, but I wouldn't say it's all doom and gloom necessarily. Uh we have to see what happens in the elections that take place in Europe that are coming up. We have to see very much whether or not we can reduce the cost of energy, because that is a major concern for consumers like us and consumers like us as individuals. So there are issues impacting the energy transition, but do we think that they are going to be fatal to this uh particular course of action? I doubt it. And also, one final fact I did read in the paper, and I do uh like you read the papers, um, I noted that there has been quite an increase in electric vehicle sale uh in the United Kingdom year on year. So whilst the electric vehicles may be under fire from some parts, they still seem to be increasing in sales in some parts of uh of Europe.

Assheton Carter:

Great. Well, there's a lot to unpack then. I want to come back to um investment, supply chain, um, and competitiveness. Um but just turning to the policies that the EU can enact or promote within its member states. Um you mentioned there about you mentioned energy pricing. And really, I think what I'm understanding here is that the narrative that is going to be more compelling for the economies and for consumers of the moment is can we actually get cheap energy? No economy has ever um succeeded with our access to cheaper energy. So what are the um and I think Draghi also in his report talked about cheaper energy. And one of the things he mentioned there was the possibility of getting more collective action from member states to negotiate, um, especially I think on gas. And that was also in your previous portfolio working on gas. What do you think are the policy levers that the EU can pull to kind of help on things like energy pricing from renewables and is a possibility of actually getting member states to work together? Hasn't had a great history on that. Um, but love to hear your perspective.

James Watson:

I mean, you can't have an economy that runs on energy that is four or five times more expensive than the United States, two to three times more expensive than than China. So, really, from an industrial perspective, uh looking at Eurometo today, our main question is not so much, you know, how are we accelerating the clean energy transition? Our question is how are we accelerating lower energy prices for industry to maintain our competitiveness. And there, I think you've uh touched on a couple of ideas. I mean, yes, you're right. In my previous role, we looked at things like collective buying, uh, demand aggregation uh for gas. And there is talk about doing the same sort of demand aggregation for critical raw materials, um, you know, trying to achieve the possibility to get cheaper energy or cheaper critical raw materials for European consumers. Uh I think that in principle uh we can be quite skeptical about whether or not these approaches will work because I think it is quite difficult uh to see how you actually implement uh those specific options. For example, on gas, they used a sort of dating site, if you will, where uh suppliers of gas put their sort of uh offers in and buyers of gas put their uh expected prices in, and then you have to see whether there was a match. The only thing that did was actually match people who are already working together in the market. So the question is, why are you trying to replace the market? If you take that into critical raw materials, with most critical raw materials having their price set in the London Metal Exchange, why would we get a better price? If you have a kilogram of gold, if you're selling a hundred kilograms of gold or or ten thousand kilograms of gold, you're still going to want the price of what one kilogram of gold is. And that's that's that's the question that we always have. How do you actually make this sort of demand aggregation work? You might be able to say, well, if you buy bigger volumes of gas that you can say, okay, we can invest more in gas, and so we might be able to therefore reduce uh the price slightly. You might also say that applies to critical raw materials. In practice, it's not necessarily how we see it because it's not that there's huge oversupply uh in the markets on many of these commodities. So generally, the market is doing what they say that should be done collectively. The market is already doing it. So interfering with the market isn't necessarily the best route to try and improve our uh, how should we say, price and sustainability. We could look at stockpiling uh in Eurometo, we think about it and try to assess whether or not stockpiling is good, but maybe that's more for a security or strategic autonomy sense rather than necessarily getting the price down. And so that's a different, that's a different matter. I have some sympathy with the policymakers. How do you make energy cheaper? Uh, we are still living in the aftermath of the Ukraine war and the Russian manipulation of gas prices, which then of course led to uh an impact on the electricity prices. We still have not yet found a proper uh replacement for Russian gas in the sense of one that is equally as cheap as Russian gas was. LNG from the United States and Qatar to a lesser extent has replaced that, but LNG is more expensive by its nature. And so I think we are kind of transitioning into a new reality where the price of electricity is always going to be a little bit higher than it was when we had Russian gas setting the basis of the system. And I think we have to also adjust uh to that. But it doesn't mean you can't do specific things. And I think we should be looking very much at how we can make uh power purchasing agreements more effective. The European Investment Bank, again, is talking about underwriting them to make sure that there is a uh possibility for energy-intensive industries to access, at least for the parts of its energy that they can consume through power purchasing agreements, uh, they can access more uh fairly priced uh costs of renewables for their for their energy consumption. There's also, you may have seen, uh, aluminium Dunkirk recently signed a long-term contract with EDF uh for 10 years to supply energy. I mean, obviously it's not in the market, for what the price would be, I couldn't tell you, but basically it's going to be cheaper than what they would source from the market, otherwise they wouldn't go into it. So maybe we'll start seeing more long-term contract session. These are developments that we have to monitor and see how they will impact the possibility of European industry getting cheaper prices. There will always be the question of whether or not the competition authorities will allow it. Um that would also apply to buying collectively, by the way. Do the competition authorities allow that kind of cartelish behavior or long-term contract behavior? And so far the indication is that they would, but it's again a point that we need to watch. And just uh, you know, one other point in how we actually look at what we want to achieve. We also claim desperately that we want to produce batteries here, and if we produce batteries here, we can make them cheaper, and therefore that will help us in the long run. And then you look at some of the regulations that impact whether or not we can have a battery processing plant in Europe, and you find that things like uh the Water Framework Directive allow you not to actually have any runoff from your factory of lithium going into the water supply of any considerable note. In fact, the rate is so low it's less than the amount of lithium you would actually find if you drank a bottle of San Pellegrino. Now, these are the sorts of inconsistencies we need to get rid of. I don't see how industry can be cleaner than the water industry in terms of the drinking bottled water industry, uh, when we're actually producing a lithium plant. So this is an inconsistency that needs to be addressed, which might then encourage investors, because right now we aren't going to make any efforts on things like lithium processing if the Water Framework Directive doesn't allow us to have a processing plant here.

Assheton Carter:

But even if you were able to um diminish those inconsistencies and those trade-offs and the different regulations, is it not true that you know China's already won on many of these things, such as um supply of solar modules into Europe and the grasp they have and control over batteries? And should we not just really be seeking better arrangements with China to meet our goals?

James Watson:

We have to work with China. I'm not really one for economic nationalism. I mean, we do talk about bi-European and we do talk about yes, they need to have lead lead markets for for green commodities. But we also have to be realistic, and I think it makes sense that we need to work with the United States, we need to work with China and others. Uh in the metals industry, we could say that very clearly. I mean, most of the ore that we smelt here is delivered from Brazil or other countries in Africa or Australia. So we are a global uh industry. We do require value chains, and so we have to be smart about the way we go about our uh industrial and trade policies with our partners. And this is a very good question, then, that you ask about whether we should be spending lots and lots of money trying to reinvigorate a solar panel industry in Europe. I mean, that is a genuine public policy question, isn't it? Do you want to spend lots of taxpayers' money to subsidize production of solar modules in Europe? You might argue that you need to have some production from a purely uh economic security point of view, because as you read, as you have read and mentioned, Ashton, there's a lot of concern about whether or not it's smart to allow the Chinese to run our solar systems using the inverters, which are basically the digital brains of the solar systems, many of which are being supplied by Chinese companies, whether or not that's a really good idea. So maybe you could argue from a national security point of view that we should develop some of these things. But are we talking about a mass market? I mean, look at the steel industry in the UK. When the last smelter was going to be closed down, the parliament was called back on a Saturday to vote to nationalise it. That's because it was for national security, uh not for any other particular competitive reason. We probably want to avoid getting to that level on the metals industry in general. But there is an argument that you will need to have a certain amount of production. But our factories were always producing one, two, three gigawatts of solar panels, and the Chinese produce 10, 15, 20 gigawatts. How are you supposed to compete? Even if they weren't getting the state services that they do, you're still going to struggle to compete with that level of automation, the amount of AI they have in their manufacturing system. It's not to say that the Chinese are, you know, sometimes denigrators and say, oh, you know, poor quality. Not at all in solar. They're producing very high quality panels. So, yes, I think we have to have a more constructive relationship when we talk about things like that. When you get to wind, we have a wind industry. It has not been sacrificed. There is an opportunity, and I think you know, organizations like the European Investment Bank will do what they can and the European Commission to make sure that that industry does not disappear. And I think as a metals producing organization would definitely support that as a point of view. And batteries is more complicated. Yes, the race has begun. And the current batch of technologies seem to be quite strongly in Chinese ownership, but we also have to focus on what comes next. And it won't always be that this set of uh technologies will be the ones uh that we will be most effective in. And then, secondly, we also have the possibility for recycling. So if there is going to be production from China, then at least in Europe, from where we're going to consume these things, we should have the ability to develop the right recycling centres, which should then allow us perhaps to create our own secondary industry, if you like, based around recycling and remanufacture of batteries. Uh, and they, you know, have great companies like Umicor amongst our membership who are recycling batteries right now, dealing with things like black mass uh here in Europe. And so I'm more positive about what we could do on batteries, but I think we just have to choose where are we putting our investments. If we're going to go on a one-to-one race with exactly what the Chinese do, you mentioned North Vault. Yeah, this is a difficult game. If we're smarter, we look at where we can actually have the market advantage, recycling, secondary development, new technologies, uh, I think there's still a good case to be made that we can lead in battery technology in Europe.

Assheton Carter:

A great segue. Um, you touched on some of the things I want to talk about next. Um, with this policy background and also the backdrop of the competitiveness, you know, the foreign exchange rate now with the US is you've got Euro, which is very strong as well, and the the dollar, which is um uh much lower. So their products are going to be cheaper to buy over here. If we look at the metals industry, so your members in Eurometro, what does all this mean for them? Have we got you know those factors of production that we need to really bolster the industry? Um, the land, labour, capital, and entrepreneurship that is needed for the European minerals and metals industry?

James Watson:

I think that it the European metals industry is uh obviously having a uh a difficult time at the moment, an economic situation. Uh also not necessarily having the right policies in place uh to make sure that it can really thrive. You also see massive overcapacity being developed in China and India around things like aluminium and steel. And so, yeah, this is a a time of challenge for our sector. There is no doubt about that. We need this metals industry here in Europe because we need to have our strategic autonomy to do the things that we want to do. Wind, um, battery electric vehicles. These are all things that you have to have uh the metals industry for. And not forget defense. You mentioned the United States in a different way, but let's talk about it. I mean, if the United States are a bit shaky on their defense of Europe, Europe will have to defend itself, and you don't make tanks out of plastic. You make tanks out of metal. And so, in reality, there is also going to be the need to have those metal uh industry capabilities here in Europe, also from a strategic security and defense point of view. So we have different issues facing us. It's difficult to be competitive at the moment, but the future is that we need these metals to be made here in Europe. So, how do we cross this bridge of high energy prices, unfair competition coming from around the world, uh, controlling exports from China so that we can't get the access to all of the type of things like antimony and germanium and gallium that we want to have, and getting to the future that we we need to be. And I think this is where you know public policy steps in. This is where you have things like the Critical Raw Materials Act, the Net Zero Industry Act, where the policymakers are looking at it and saying, okay, we understand the situation as it is and we have to change it. And I think, you know, you were saying two years ago you wouldn't have read lots and lots of articles about critical raw materials, and today you do. And part of the reason for that is because a year ago we passed the Critical Raw Materials Act in Europe, uh which has actually prioritized uh the self-production of critical raw materials here in Europe, uh, whilst also looking to work with like-minded countries around the world. And so what we have to be uh really clear on for the metals industry is together working with policymakers, uh, together working with the unions, uh, together making sure that we have a common approach, we will be able to have a strong uh industry, but we have to get that regulatory framework correct to drive the investment into it. If I'm a you know an investor and I'm looking at, well, what am I going to invest in? If I see that there's strong public money going into things like making a new aluminium smelter, then maybe I'll also consider that, okay, there's going to be public policy support and success for this, then I will also go. If you don't have that framework, then the investor might choose to invest their money somewhere else, healthcare. I don't know, another better, uh better faring opportunity. So we have to make sure we have the framework right. We have to have those things like the Critical Raw Materials Act, which highlight that we need to have at least uh 15 new processing plants in Europe by 2030, 15 new recycling plants, and very interestingly, 10 new mines in Europe by 2030, if we're going to start successfully developing our own critical raw materials here in Europe. And that's all a boon, a huge boon for the metals industry. So, yes, uh so far, so good, but then you get to the implementation, there's no money, Ashton. They sort of like it's all goodwill. Good luck, James. We've given you everything you need. It's well, but hang on, we need to put some public money behind this. And so we're kind of waiting to see whether or not in the next budget of the European Commission they will actually have some specific financing for the critical raw material projects that they have identified in Europe and around the world that will help us with our strategic autonomy. So again, there is a possibility of a bridge, and we've put sort of the first few bricks and pillars in place, but there's nothing joining those bricks and pillars yet because that would be the money, and that's what we're missing.

Assheton Carter:

Yeah, I know that I'm glad you brought that up because that's where I was gonna go next, is on the investment. And um, I was reading that you know, for the EU to meet its um Green Deal um ambitions, that we're gonna need 520 billion dollars, 100 billion euro a year till 2030 to meet that. Um, and the Draghi report, Draghi report he called for investment-led growth, um, really kind of talking about external investment, but that investment, um, which could have come from places like the US, that's been invested in the US more and more. So, where's this going to come from? So several countries have been supporting funds, like I had InfraVere on the podcast the other day, in France, Italy has done that, Germany as well. Um, but they're looking more at securing supply chains and um surety of supply for the actual minerals, not investing so much in the in the whole value chain. So, where where is this going to come from? Noted that we have to have the right regulatory framework to make it attractive, but where are these deep pockets?

James Watson:

That is the that is the question, isn't it? We're all looking for leprechauns with little buckets of gold at the end of rainbows. I mean, the general view is that there should be a sort of uh, how should we say, public-led investment approach. So that there should be public money. But I think you and I both know that there's not that much public money sloshing around. These times have been difficult. Uh, we've been through the financial crisis, we've gone through COVID, we've gone through the war in Ukraine. Economies are not what they once were in Europe. It's not to say that we're poor, we're not, uh, but there have to be decisions uh made. We have a lot of burden and the public uh finances from social policy, social care that we we demand. Pensions, healthcare, education. This is the you know the standard bearers of our way of life. But then how much money is going to be left uh to develop critical raw materials? And that's, I suppose, my my main policy battle at the moment. We are saying it's very good that you recognize the need to have uh these metals made here in Europe, uh even mined here in Europe, but we're not going to get all this money from the financial markets unless you actually put together specific financing tools where you also have to put money in. And look, it can work. The European Commission talked about putting uh a couple of billion into a fund to encourage member states to buy uh defense equipment together, uh, with a focus of trying to get that up to about a value of about 850 billion. My understanding is that the first few months of this year it already achieved 150 billion. So that's not bad. You know, that's a bit like your sort of Jack and the Beanstalk story where you put a few beans in the ground and you end up with a massive beanstalk. So it can be done. Uh, it just needs to be clearly led. Uh it needs to be very clear and easily accessible for not just the finances, but also the companies, so that we can actually say, okay, we understand what we have to do to access the public financing, and then we know exactly how to go forward with investors and say, this is the kind of deal that we've got, maybe from the EIB, uh, maybe from a European Commission Fund, Innovation Fund, or something like this. And then being able to find a way to match that kind of money with. More private money. And I don't really see that there's much alternative to that because it's not going to be publicly sponsored. We don't have the money for it. So it is a question of how you drive investments into that sector from the private sector. And I honestly believe that the best way is to be public money led, but definitely not dependent on it. It's not what we want as an industry in any case. We want to be competitive, we want to make sure that we have our rights to say, you know, that we are a standalone industry. But you just don't get that just overnight and by wishful thinking. You also have to look at the public policy environment and the financing that's provided for it to do it. And so from this point of view, as I say, the missing part of the bridge so far is really finding the public financing to support it. I think private financers will come. They understand what the future is going to be, and they know the future is going to be highly metal dependent. It is, well, today life is highly metal dependent. It's going to be in the future too. So it shouldn't be too difficult, but I think they're not going to go into those places unless they have very good guarantees that there is a policy framework that works and allows companies that I represent to be successful and profitable over the long term.

Assheton Carter:

I I guess you could say skeptically that the threat of conflict with uh Russia has focused our minds to bolster defense industry has had a positive impact with a message.

James Watson:

That's absolutely correct, Ashton. Yes. I mean that and I would say it's not just uh Russia, because you think this happened three years ago. I think it's also the American position towards Europe today. That's really refocused the minds. So we are now living with a war on our border. Uh, under the Biden administration, I think everyone still felt very cozy and thought, like, okay, everything's just going to stick along as normal. NATO's got its place. This changed quite dramatically with Trump, who became, at least at the beginning, not so much now, but at the beginning of his uh tenure, he was quite ambiguous on his view of whether or not NATO should support people who don't meet their 5% uh commitment. So this really refocused the minds. When the Americans questioned whether or not they would defend us from Russia, I think the European stuff, you know, like, well, we better be able to defend ourselves just in case.

Assheton Carter:

So we talk about the policymakers and the investors and the need to create that enabling environment and those policy frameworks. Um but investors also look at other stakeholders, um including local communities, those local stakeholders. And you mentioned that there are some more mines now being prospected, developed, constructed in the EU, but there's also quite considerable resistance. What are we going to do to rebuild trust of the metals industry, and especially in an automated, more automated mining industry, show that there's going to be benefits for some of these communities?

James Watson:

Yeah, I mean, this is always the question, isn't it, in Europe? I think we're already super happy with our iPhones and our uh Samsung's and whatever else we have in our pockets, uh, and not wanting to have the minerals and the metals that are used to produce them uh mined here in Europe. It's like we have a whole way of life that is totally dependent on mining elsewhere. A lot of the mining is, like you said, automated. You have people sitting uh upstairs. They can almost be sitting in their bedrooms and controlling the machines that are doing the mining. We are talking about highly, highly developed, very technologically sound installations, uh, very high level of environmental performance. This is what we have to really think about. Where do you want your mind to be? Do you want it to be in a country X where you have no real control over how it operates, or do you want it to be in Europe, providing jobs, providing economic stability, running at the highest rate of environmental soundness, or do you just want to get your iPhone as cheap as possible? And that is really a question also that consumers have to ask themselves. Do we want to really hate European mining and rather outsource all of that problem to people who have no real chance to express themselves just to keep us going in our way of life? My view is we need to do more mining here, we have more regulation, and we just have to get used to the fact that we will have mining again. It used to be the backbone, not more than 50 years ago, of communities. So, in reality, I think again we have to say we need a much more healthy view and pragmatic view of what the mining industry can do and what we need to do here in Europe to be responsible for our own consumption habits.

Assheton Carter:

So is this a policy dilemma that we haven't yet resolved? Because I still see things like Ye Dang, well, this is a strategic project for the EU, but still there's massive resistance. The case hasn't been made.

James Watson:

Yeah, and I think that's actually correct. It should be a sort of public-private partnership on the education uh and benefits uh that communities can see that they can get government uh activity to support these things. If you say you want to have 25% of your annual consumption of materials through domestic uh sources, then you have to make that happen. Then you have to have the ability to drive mining. And then I come back to investors. Investors will look then and say, well, they said they were going to do all that and they didn't do it. So how much can we trust Europe as a place to invest? Because they say that they will do something, but then they don't do it. That doesn't really look good from a kind of security point of view to attract for foreign foreign investment or even internal investment.

Assheton Carter:

Picking up on one point um on circularity, you mentioned about the 25% from recycling. What needs to be done to make that happen?

James Watson:

This is very interesting. I think there are two elements uh here. That's one is uh I would say the collection and sorting, and two is trade policy. And I'll come on to the trade policy aspects in a moment. We definitely need to get better at collecting and sorting here in in Europe. Uh I always like to use a sort of uh example which people can understand. Many people have in their drawers at home somewhere one or maybe two or even three old mobile phones that for whatever reason they're hanging on to. Well, in fact, they're all full of critical raw materials that we need. And there are recycling centers in Europe that can do with them that are crying out for that kind of material. We need to perhaps provide incentives to consumers on a basis to make them do this. And I'm not talking about lots and lots of money, but basically finding the right way to encourage them. Again, information campaigns, which uh local authorities could even run it. It doesn't even have to be central government for that sort of thing, to encourage kind of citizen responsibility. And then the final, the second point that I really want to go on is trade policy, because today we are seeing record volumes of copper and aluminium scrap leaving Europe. Effectively, the scrap dealers can charge very high prices, and the Chinese and even the Indians will pay it. And they do say quite deliberately, they will pay above market at Ashton simply to get that strategic raw material out to India and China and not in European hands. We are saying very clearly in Eurometo that for aluminium scrap, there should be at least an export duty to correct this public policy failure. We ought to do the same. We should say to them, well, until you start exporting scrap, we will not export to you. And this, together with what I said about improving our own rates of recycling, our own collection, would definitely improve the outlook and probably reduce the cost of the scrap that we need here in Europe to develop our own recycling industries.

Assheton Carter:

Look, it's been a great joy speaking with you, James. I'd like to end on a little kind of word game. I'll read out three words to you, and then you respond with a sentence or two on those words, whatever comes to mind first. The first word is mining.

James Watson:

European sustainable, responsible mining. This is what we should be aiming for. It is not to say that we don't want globally sustainable, responsible mining. We do because we will also rely on it and we will rely on it for probably for forever. We need to have those relationships. But mining done in Europe, which is responsible and ultimately sustainable, is definitely the first thing that I would like to your listeners to take away when they think about mining. Excellent.

Assheton Carter:

The second word here is tariffs.

James Watson:

Um I would honestly say that for when I hear the word tariffs, I generally feel quite sad, especially with what's happened in the last uh six months or so. I really see this as uh economically humbling the world. Uh the US uh playing the tariff game, which actually the Chinese have played in their own way for a very long time, uh, is not beneficial to anybody.

Assheton Carter:

Right. I think there's great wisdom there. And then the the the final the final word 1.5 degrees Celsius.

James Watson:

Good luck to us all for that, I think. In principle, we would definitely want to see that target being achieved. But as you look around the world and you look at the policy developments, and uh I think the European Commission are being quite vocal in criticizing the Chinese uh at the same time as not having an offer for the 35, 2035 target. We are we are struggling. Uh it is still on the table, Ashton, uh, but I think you and your listeners know that we are at a critical moment. And at this critical moment, I don't think we have the governments in place anywhere in the world to really deal with making sure we achieve tenures on the target that was set at Paris.

Assheton Carter:

Well, James, thank you very much for um joining us today. I think you've highlighted many of the challenges that the industry has, but that you're up for that challenge, and your metto under your leadership is taking it to the policy makers. So I'm sure you're going to be successful. Please check out the rest of our podcasts on TDI's Suits and Boots podcasts channel. Uh, we have many topics on there, including fast track and mining, um, investment, uh, addressing workforce challenges, uh, opportunities for merging commodities, critical minerals at the crossroads in Africa, uh, and many other interesting conversations.