The aluminium industry faces huge upheaval to achieve net zero by 2050. The latest analysis lays bare the sort of regional imbalances that are a foretaste of what is to come for all hard-to-abate sectors, not just aluminium. At COP 27, the Mission Possible Partnership (MPP) launched its 2030 Milestones, which build on detailed decarbonisation pathways published a few months ago. It is not just a question of investing in renewables and increasing the rate of recycling, difficult as these tasks will be. Those areas which will not be able to access cost effective renewable energy, may be forced to close their smelters, or be subject to punitive taxes. As an alternative, they could specialise in collection and recycling of scrap and post-consumer waste to create new low-carbon products made from secondary aluminium.
Aluminium smelting, with its huge demand for electricity, is at the forefront of the battle to decarbonise. Steadily rising demand for aluminium in long life-time applications such as lightweight vehicles and building materials, means that existing smelter capacity will be required to meet raw material requirements in the short and medium term. The industry knows that it must set out on the path to net zero in order to survive. After all, there is no point driving a lightweight vehicle to save greenhouse gas emissions if the production process of the car itself causes climate change. And once acquired, a reputation for being bad for the environment, is difficult to lose.
The Mission Possible Partnership study shows how the access to low-carbon power varies considerably by region. Europe (excluding Scandinavia) is the region with the most difficulty worldwide; 63% of its 16 smelters are at a high risk of not being able to access affordable, proven low-carbon power. This contrasts with the US, Canada and Scandinavia, all of whose smelters already have access to low-carbon power. China also has a problem, with 52% of its 84 smelters in doubt. The only possibilities for these ‘stranded’ smelters, is to retrofit CCS (carbon capture and storage) to their power generation or to use a novel solution such as new forms of renewables or long-distance connections to low carbon regions. All of these options will be expensive. The best solution may be to move this smelter capacity to a location with abundant renewable energy.
Regions that will be disadvantaged for low carbon smelting could choose to become centres of excellence for collection, sorting and recycling of post-consumer waste, thereby reducing the reliance of their local economy on primary aluminium production. Regional specialisation has been a driving factor for innovation, ever since the first coal mines powered the industrial revolution. The MPP study stresses that the whole aluminium sector is reliant on recycling to increase from 70% to 90% to make net zero. The sophisticated facilities needed to dismantle multi-component products, separate and purify alloys and recycle laminated packaging will have to be centralised to maximise efficiency. I have already written that European cast houses, semi fabricators and their customers should recover their own end-of-life aluminium alloys to avoid high quality raw materials falling into the hands of competitor trading blocs. The MPP’s analysis adds weight to that argument.
Other industries are already responding to the need to source and recycle more end-of-life materials. The biofuels industry has set up a large network of collectors who pick up used vegetable oils from restaurants and food factories so it can be refined into biodiesel. Petrochemicals producers are partnering with companies who breakdown mixed waste plastics into an oil which can be used as raw materials for new products. These operations require the transport of end-of-life materials over longer distances so they can be reprocessed in centralised facilities. This is an unavoidable part of a Circular Economy, and it is preferable to the current situation where scrap and wastes are exported to countries with lower environmental standards than those of Europe.
In a time of ever-increasing energy costs, and with huge investments in renewable power generation required for net zero, it is indefensible that significant quantities of such a highly energy intensive material as aluminium, should go to landfill or disposal. Collection and recycling are expensive, but the economics of aluminium smelting will also become less favourable. Low-carbon aluminium is predicted to cost up to $400/t more to produce than conventional aluminium on average by 2035, taking into account technology retrofits and other costs.
MPP’s strategy to decarbonise the aluminium sector has the backing of more than twenty industry players and trade associations. Some of them are already producing low carbon aluminium and increasing investment in secondary aluminium. The financial, regulatory and reputational drivers to increase recycled content in all products will strengthen. The climate is now right to optimise the regional distribution of different parts of the aluminium supply chain to meet the needs of a net zero and circular economy.
Published: 21 November 22
