Power Struggle: AI, Smelters & the Future of Energy Use

This week, The Financial Times reported that Western metal smelters are calling for power subsidies to stay afloat. Their justification: they are being squeezed between coal powered Chinese rivals and hyperscale data centres soaking up cheap electricity.

On the surface, this might sound like a reasonable ask. Smelters are essential to many supply chains, including those driving the green transition—aluminium, copper, and nickel are core to batteries, wind turbines, and EVs. But scratch beneath that surface and a more urgent question emerges: are we investing in legacy infrastructure and delaying the inevitable at the taxpayer’s expense?

It’s clear to DEScycle that we’re entering an age where industrial competitiveness hinges on electricity efficiency—not CO2 emissions. Investment should build the future of metals recovery, not prop up the past.

The Electricity Economy

We’re not just in an energy transition—we're in a systems transition. As we move from a carbon economy to an electrified economy, the competitive advantage of industrial processes is no longer how efficiently they burn carbon, but how efficiently they consume electricity.

As the economy electrifies energy demand increases. Rising demand without matching increases in supply means more competition for electricity and higher prices. The IEA projects data-centre electricity demand will more than double by 2030, with AI-powered centres driving a quadrupling in consumption, roughly equal to Japan’s entire demand today.

In that world, traditional smelters—power-hungry, high-emissions, and inflexible—look increasingly obsolete. As the price of power rises, particularly renewable power, every kilowatt must be justified.

The new economy rewards power-efficient, distributed, and modular technologies that are less vulnerable to geopolitical shocks and market swings.

Smelters Were Built for the Last Century

Traditional smelters are energy-intensive giants built for an era of cheap coal. They rely on high-heat furnaces that are outdated and inflexible in a world racing toward electrification. Rising energy costs in the West paired with increasing competition from foreign smelters and competition for power at home against “Big Tech” has led to a crunch for the smelting industry. Governments will face choices of subsidising the power needs of domestic smelters whilst also balancing their own net-zero and fiscal commitments.

That contradiction should make us pause. If smelters need public money to survive against data centres and global competitors, they’re not just uncompetitive—they’re strategically mismatched to the future we are building.

The Future of Metal Recovery

At DEScycle, we’ve developed a smelter-replacement technology. With the innovation mantra of “build a better mousetrap”, our Deep Eutectic Solvent (DES) process recovers metals including gold, copper, and palladium from e-waste at room temperature, with modular units that operate on a fraction of the electricity. We outperform on efficiency averaging over 99% metal recovery. Our tech doesn’t rely on furnaces, acids, or massive capital outlay. It’s modular, clean, and inherently more adaptable to a resource-constrained, power-conscious world.

This isn’t a concept, the tech is proven and patent protected. We’re backed by Cisco and Mitsubishi Corporation and will be launching a demo plant later this year. Crucially, we can offer what the old model never could: decentralised metal recovery with vastly lower energy inputs—transforming waste into an domestic strategic supply or critical metals.

Subsidise the Past or Power the Future?

Policymakers face a choice:

• Continue propping up power-hungry legacy smelters, leaving them vulnerable as electricity demand skyrockets and grids strangle.
• Or invest in decentralised, electricity-efficient innovation that aligns with clean, resilient energy systems.

Subsidising smelters sends the wrong signal. It tells investors and innovators that governments will prioritise incumbents over ingenuity. That we are more committed to yesterday’s infrastructure than tomorrow’s resilience.

Governments face tough choices—but those choices are clearer than they seem. The question isn’t whether we want metal supply security. We do. It’s how we achieve it.

Do we double down on technologies that only work with permanent subsidies and declining relevance? Or do we back the innovations that can build a metal supply chain that’s fit for a clean, electrified future?

At DEScycle, we’re ready to build the future. The question is: who else is?