Alro may ‘temporary’ halt part of production over soaring green taxes

Aluminum maker Alro, controlled by Russia’s Vimetco, said Thursday its board of administration does not support this year’s budget, which will be discussed March 8^th, due to spiraling costs with green taxes, and may be forced to close key production assets to cut energy costs.

The company said the new mandatory acquisition quota for green certificates is 17 percent higher than its estimate. The energy regulator ANRE decided in late February the quota for this year stands at 0,225 green certificates/MWh. This has to be paid by all energy consumers as part of the support scheme for renewable producers in Romania.

“The increase in green taxes was generated by the roll out of new solar installations (an increase of 2,000 percent in capacities in the last year) and of wind capacities, installed by the end of 2013. The main factors with major impact are the lack of predictability of the application of the support scheme for renewable energy and the reduction of the international aluminum market,” said the company in a notification submitted to the Bucharest Stock Exchange (BVB).

Read more about

MONSSON connected to the National Grid the largest Energy Battery Storage capacity in Romania

read more

Alro said it would have to pay another RON 20 million in regularization fees for last year. This year, the costs with green taxes will exceed by RON 80 million the company’s estimates.

Aside from the increased impact of renewable incentives, the company pointed out to a lack of any support for big industry, although the European Commission, the executive arm of the EU, has laid out a series of recommendations in this sector.

“Thus, the company has to draw up a plan for closing a significant part of key assets for the production of primary aluminum, thus, drastically reducing energy consumption,” said Alro. It added this move will lead to “a significant reduction” in the number of employees.  

The aluminum maker has reported last year a loss of around EUR 17 million last year, from a profit of approximately EUR 27 million in 2012.

The government has deferred last summer the issuance of some green certificates, in a last ditch attempt to limit the impact of soaring renewable capacities on the bills of households and large industrial consumers.

Ovidiu Posirca