Canada–EU Summit Offers Opening for Green Iron and Mineral Refining

Canada and the European Union should use their Montréal summit to advance green iron production and critical-mineral refining, says economist Aaron Cosbey, who argues a deeper partnership could help Canada capture more industrial value from its resources.

Speaking with Energi Media ahead of the October 29–30 Canada–EU summit, the International Institute for Sustainable Development senior associate identified two opportunities combining Canadian resource and electricity advantages with European industrial demand.

The challenge, he said, is coordinating investment, customers and supporting policies rather than treating industrial development as a collection of subsidies.

Green Iron Could Connect Canadian Power With European Steel

Cosbey’s first proposal is a green iron corridor: produce low-carbon iron in Canada and ship it to European mills for steelmaking.

He argues that European steelmakers face a difficult combination of decarbonization requirements and insufficient renewable electricity to produce all the hydrogen they would need for cleaner primary ironmaking. Transporting hydrogen itself adds substantial expense.

Canada could instead use hydrogen domestically to convert iron ore into a product that can be shipped more readily. The proposal would move an energy-intensive processing stage to Canada while European businesses retained downstream steel production.

“It would require, though, a bargain between the European Union and Canada,” Cosbey said. Europe would be surrendering part of its value chain to help preserve the competitiveness of the remainder, he explained.

Critical Minerals Need Buyers and Price Protection

His second proposal addresses mineral refining, a bottleneck that additional mining alone cannot resolve.

Cosbey argues that Canadian mineral resources and European manufacturers’ need for dependable supplies create an opportunity for joint investment in Canadian processing capacity.

“Canada has plenty of those minerals. We don’t have the refining capacity,” he said.

He proposed combining equity investment with long-term purchase commitments and a mechanism such as stockpiling or minimum prices to help protect projects against market volatility and aggressive competition.

European customers could provide demand, while Canadian processing could also feed domestic electric-vehicle supply chains. The objective would be to build commercially durable capacity outside China, rather than simply increase exports of unprocessed minerals.

Industrial Policy Extends Beyond Subsidies

Cosbey defined industrial policy as government action that builds economic capability in selected sectors. He stressed that manufacturing is only one possible focus; agriculture and digital services can also be targets.

Electrifying freight illustrates why coordinated policies matter. Even where operating economics favour electric vehicles, companies still need charging infrastructure, adequate electricity supplies and regulatory approvals, he said.

“They need clean electricity and ample supply,” Cosbey said.

He also highlighted public procurement as a tool Canada could use more effectively to support industrial development.

The summit is scheduled to bring Prime Minister Mark Carney together with European Council President António Costa and European Commission President Ursula von der Leyen.

Cosbey cautioned against allowing support for oil and gas to substitute for a strategy aimed at emerging economic opportunities.

For the proposed partnerships, the practical questions are where processing facilities would be built, which customers would buy their output and how governments and companies would share investment risks. Those decisions would determine whether closer diplomatic ties translate into Canadian industrial activity in coming years.