Aurubis Bulgaria is part of Aurubis AG, a leading international multi-metal producer based in Hamburg, Germany. In Bulgaria Aurubis operates the copper plant near Zlatitsa and Pirdop in the region of Srednogorie and plays a strategic role for the country's economy. Tim Kurth is Chief Executive Officer of Aurubis Bulgaria since 2014 and President of the German-Bulgarian Chamber of Industry and Commerce.
Mr. Kurth, the European Union recently introduced regulations on critical raw materials, including copper, in light of the bloc’s green transition efforts. How has this impacted Aurubis Bulgaria's operations and future plans, particularly in terms of sustainability and decarbonisation efforts?
The discussions on the Critical Raw Materials Act are at an advanced stage, and this process runs parallel to other initiatives, for example the Net-zero Industry Act, the Corporate Sustainability Due Diligence Directive, and the reporting according to CSRD, which will come into force next year. It is important for these initiatives to complement each other within the entire packаге and to avoid internal conflict points. Because the new framework aims at two simultaneous goals: keeping competitiveness, and turning the EU into a climate-neutral model.
I am confident that Aurubis Bulgaria is well positioned in the whole process. What we see is an increasing demand for copper, а logical result of the transition to a low-carbon economy, which the regulations aim to put in order and stimulate. We produce this highly sought-after material in Bulgaria, the cathode copper. Aurubis Group’s largest investment in a single project in the country so far, of EUR 120 mln, is aimed at the expansion of our annual cathode production capacity to 340,000 tonnes, which corresponds to the trends. The expanded capacity will also bring more value-added to Bulgaria's economy.
When it comes to the second part of your question, Aurubis AG, as a large-scale company, is in the first wave of those who will start reporting according to CSRD. This will begin with our next annual statement, for the financial year 2024-25. We have been prepared for this step, since we have had internal sustainability standards for years. For example, our Bulgarian smelter was among the first ones in the world to be certified according to The Copper Mark, the sector standard in our industry. I would also point out that part of Aurubis Group Sustainability team, our experts responsible for preparing the ESG reporting, are based here, in Bulgaria, in our new Sofia office.
The Aurubis Group decided to invest heavily in the United States even though the bulk of its operations are in Europe. Could you elaborate on the specific challenges or shortcomings in the European landscape that led to this decision? What changes or improvements would you like to see in the administrative procedures within the EU to encourage investment and business growth?
The decision to develop the plant in Richmond was taken by the Supervisory Board at the end of 2021. This step was not determined by challenges or overseas incentives like the Inflation Reduction Act. There is a market demand for copper recycling in the USA and Aurubis has taken a pioneering step by developing a secondary smelter there. In parallel, this investment is in line with Aurubis business strategy and sustainability targets. One of these targets is 50% of our copper cathodes group-wise to be based on recycling input by 2030.
The topic of what steps Europe should take is not limited only to the regulatory framework, incentives for the business, and other administrative and financial measures. This topic goes beyond the challenges towards our sector and the industry as a whole. It is getting geopolitical, with some existential hues. Sustainability is not a keyword or a set of targets for the business only.
Political stability and predictability is important, not only for Bulgaria, but for Europe as a whole: the undertaken initiatives will have an effect for decades. Just like the strategic business planning of companies like ours is developed for decades ahead and takes into account not only regulations, but also the international price competition, energy costs, energy supply security as factors. It also takes into account the demographic trends and the shortage of qualified labour force, which, in turn, is related to development of reasonable sector policies, for example in education. These are long-term processes in which the decisions for reforms taken today will have an effect in a generation. Business and politicians are in this together and the round table is invented for such purposes: to discuss and look for solutions together.
Aurubis Bulgaria has been one of the pioneers when it comes to development of in-house renewables. Are there new developments in your pipeline?
Yes, we are already well recognized with our own photovoltaic capacity. We will increase it to 44 MW by the end of 2026 with three more in-house PV plants. I would underline that it is part of a well-thought strategy linked to a clear internal target: to reduce our carbon footprint by 50% by 2030. This encompasses a group of projects that also include studies for waste heat utilisation, wind and hydro energy, alongside a large-scale energy efficiency program to reduce consumption. Most of the projects are focused on reducing the so-called Scope 2 - the indirect emissions imported with the electricity we buy, since 80% of our footprint is due to that indirect impact.