Aluminium: recycled, recyclable, renewable, sustainable

The past two years has seen a flurry of announcements of new brands associated with different types of recycled and ‘renewable’ primary aluminium. Added to this, the ASI (Aluminium Stewardship Initiative), an industry grouping of aluminium producers, processors and purchasers is preparing to launch a system for sustainable aluminium. But how will this branding activity affect the market for aluminium and will a price premium develop for sustainable, renewable or recycled aluminum? Aluminium is not the first commodity to differentiate a more sustainable product in the market place so there are precedents to help answer this question. 

To understand these announcements, we need to put ourselves in the position of consumers and the international brands that sell to them. Aluminium has excellent lightweighting and recycling characteristics, in addition to its attractive physical properties. However on the opposite side of the coin are direct greenhouse gas emissions, high energy use, red mud waste streams and  bauxite mining risks for indigenous people.

Recycled aluminium does not have these risks and so it is not surprising that it has become increasingly attractive to the industry. There has been an increased focus on the general recyclable properties of aluminium and other metals with the slogan and logo ‘Metals recycle forever’.  Members of the public and businesses have been encouraged to recycle more with the ‘every can counts’ campaign. But these are neutral in their impact. ‘Recyclable’ is not the same as ‘recycled’. Products made from actual recycled aluminium appeal to the environmentally conscious consumer and could actually encourage recycling. Manufacturers are therefore including more recycled content in products and backing up their claims with verification by external auditors. Brands designed to capitalize on these efforts have been launched - Evercan, RealCar, Victorinox penknife cases made from recycled Nespresso capsules. 

Producers like Novelis, Alcoa and Hydro are setting targets for the amount of recycled aluminium they will be using, with figures ranging between 50% and 80% by 2020.  The IAI predicts recycled scrap to grow to 31 M tonnes by 2020 compare with primary aluminium production of 70 M tonnes pa. It is worth noting that both post-consumer and pre-consumer scrap are included in these figures. Whilst it is more difficult to recycle post-consumer scrap, both need to be encouraged to overcome barriers to recycling. 

While recognisable products from recycled aluminium encourage recycling and appeal to green consumers, there are barriers to this approach. A purchasing and cobranding agreement is needed to ensure continuity of supply and to maximise the marketing opportunities. Regionally there may not be the availability of recycled input. Also, as the demand for aluminium grows, and products are in use for many years, there may not be enough recycled aluminium to satisfy demand.  

We are also seeing producers of primary aluminium made using renewable electricity promoting the low carbon intensity of their product with the launch of new brands. ‘RenewAl’ was launched by RioTinto. Alcoa launched ‘Sustana’ recently at Aluminium 2016. Rusal has started to use the slogan ‘aluminium crafted by hydro energy’. Customers who buy directly from these smelters will be able to take advantage of the claims to boost their low carbon credentials, and most importantly, reduce the greenhouse gas intensity they quote for their products. However, most low carbon aluminium will pass through a supply chain and without traceability, the origin of the aluminium will be lost. The next step would be to apply software developed in other sectors where traceability is important e,g, conflict minerals, agricultural products and timber, to  low carbon aluminium supply chains.  Claims about the use of low carbon or ‘renewable’ aluminium could then be backed-up and passed to the final product manufacturer. Without this traceability it will be difficult to monetise the benefits of low carbon primary aluminium.

The ASI is more of an industry wide approach, which promotes not only the production of sustainable aluminium but also traceability through the supply chain. ASI differentiates between post and pre-consumer scrap in its treatment of recycled aluminium. Post-consumer scrap from controlled sources will be straightaway ASI compliant as input to an ASI certified casthouse.  This will provide a mechanism for traceability, as ASI compliant aluminium is transferred between certified facilities. There is also a proposal to allow casthouses to sell sustainable credits/certificates separately from physical aluminium. 

Experience from other sectors tells us that sustainably certified commodities can attract a price premium over the conventional material. This partially compensates for the additional costs of production and compliance. The premium depends on the perceived risk of the product and whether it is segregated from, or mixed with, conventional material. On the flip side, there is sometimes an over-supply of the sustainable material in the market.  The initial success of the ASI looks sure, as the ten production members and seven users are committed to using the Scheme within 2 years for some production and purchasing. Suppliers of post-consumer recycled aluminium should then be able to access the same premium that ASI primary aluminium achieves. Suppliers of verified and traceable low carbon aluminium, could also achieve this premium.

This article was first published in Aluminium International Today

Published: 23 January 17

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