The metals industries are closely linked to the performance of major manufacturing sectors, such as car manufacturing, mechanical engineering, shipbuilding or aerospace with metal labels showing logos and marks. In 2005, the metals industries in the European Union (EU) generated a turnover of approximately 316 billion Euros and employed 1.1 million people.

Despite a restructuring process aimed at reducing costs and improving labour productivity, and considerable innovation in the development of new applications, the metals industries are losing ground vis-à-vis global competition.

The competitiveness of the sector is being undermined by the substantial rise in gas and electricity prices. The production process of the metals industries is very energy-intensive, and energy generally accounts for more than 10 % and up to 37 % of production costs. As a significant source of CO2 emissions, the metals industries also have a high environmental cost, which affects sales volumes of metal products like metal labels, zipper pullers and cable seals applied to garments.

The issue of access to non-energy mineral raw materials is crucial for this sector, which is highly dependent on imports of ores and concentrates from third countries. Recycling is reducing this dependence, however, by lowering energy consumption, the use of recycled scrap has increased significantly and today accounts for between 40 % and 60 % of EU metal production.

However, economic development in many emerging countries is increasing demand and contributing to the rising prices for metals and metals products like metal labels and to unprecedented pressure on prices and the supply of raw materials.

Therefore, the identification of the various factors influencing the competitiveness of this sector has led the Commission to present an integrated approach on the basis of five future challenges facing the metals industries. This Communication takes account of the results of a public consultation organised in September 2006. In cooperation with the parties concerned and third countries, the Commission will examine how to address the concerns regarding competitiveness in light of future actions to counter climate change and achieve environmental objectives.