Aluminium is one of the most carbon intensive materials. It is used in a range of goods from cars to cans and buildings to bikes. Aluminium is a key enabling material for the transition to a lower carbon economy, due to its lightweighting capabilities and its recyclability. But only green and recycled aluminium have a place in a net zero economy. The struggle to decarbonise aluminium smelting, the most carbon intensive production step, is opening up a divide in the sector, between those who those who can access renewable energy, and those who are reliant on electricity from their fossil-dependant national grid. Should they all have access to the classification ‘sustainable’?
A new company in Columbia, Galtco, is the latest to announce plans for an aluminium smelter based on renewable energy. Operators in other countries with abundant hydro or geothermal power, such as Iceland, Russia and Canada are already producing low carbon aluminium. Many are members of ASI (Aluminium Stewardship Initiative), the sector’s sustainability scheme.
Producers who are reliant on electricity from their fossil-dependant national grid are facing a struggle to decarbonise, which has prompted a surprising move from ASI. In a recent announcement, ASI said that it was removing the penalties for members who cannot reduce the carbon intensity of their aluminium, in line with a 1.5C warming scenario if the reasons are ‘structural’. It seems that, faced with significant numbers of members in countries that are not decarbonising their grid sufficiently quickly, ASI acted to prevent them from losing their sustainability certificates. But is there a compromise approach?
Ironically, other industries, such as chemicals and transport, rightly perceive that electricity is the easiest source of power to decarbonise, so they are developing electric reactors, cars and planes. The market has developed Renewable Energy Certificates, (RECs, GOOs, EACs) backed by independent oversight, as a recognised way that all producers can access renewable electricity. But some forms of purchase, those that connect the user directly to the provider, are sometimes regarded as ‘better’ than others. There is also a widely held view that renewable electricity must be ‘additional’. So, operators must support generation that is truly ‘new’ rather than buying into what is already available, which could just displace other users. The proof of ‘additionality’ has always been difficult. And some might say that if the demand for all types of renewable energy certificates increases, that in itself will encourage investment in new capacity, which will create additionality.
The view that some forms of renewable electricity are better than others seems to have been adopted by ASI. It has restricted the method it allows for users to compensate for their emissions to ‘bundled RECs’, which means that ‘physical’ electricity and the certificates must be bought together from the same provider. This is likely to restrict uptake in countries with insufficient renewable power infrastructure. Other schemes allow the RECs to be bought separately from the electricity, providing that the generator and the purchaser are part of interconnected grids, which may be in neighbouring countries or states.
Conventional aluminium smelting also generates carbon dioxide at the carbon anode. New technologies are overcoming this problem, but the technology will require investment. It is not clear whether these emissions will also be offered the same leniency by ASI.
It is clear, however, that a sector-wide approach, where all operators have to adopt the same carbon reduction goals, will be difficult when countries are at differing stages of decarbonisation and the costs are likely to depend on geography.
Certain operators in the chemicals sector have already arrived at this conclusion. Sustainability schemes are developing certification approaches which allow members flexibility in how they allocate verified carbon emissions savings to chemicals, solvents, and plastics. By offering the same product with different carbon footprints, a manufacturer can adapt to the varying decarbonisation demands of their customers. This market driven approach may have advantages over the sector wide approach adopted by the aluminium sector, and it should be available to all operators. It also takes into account the reality and cost of renewable energy provision. The Mission Possible Partnership and other commentators have already indicated that it may not be economic to produce green aluminium everywhere using renewable energy. Costs are likely to vary considerably according to location.
The aluminium sector faces some huge challenges, but it has the advantage that its main power source, electricity, is easier to decarbonise than others. It is clear that countries are going to move towards decarbonisation of their electricity grid at different rates. Of course, sustainability is about more than carbon emissions reductions, but in the case of aluminium, it is hugely important. Barriers should be removed, to make it easier for operators in countries at the back of the pack to compensate for their emissions and catch up with the front runners.
Published: 21 February 25
