Everyone agrees that recycling aluminium is worthwhile and necessary. Aluminium can recycled again and again without loss of quality, which fits well with the requirements of a circular economy. Europe recently made an ambitious commitment to an economy with net-zero greenhouse gas emissions by 2050. Of course it’s difficult for the economy to be net zero without being circular, so there will be even more focus on recycling in the future. There is also likely to be a significant impact on trade and supply chains for both primary and secondary aluminium.
Some companies have already understood that recycling of both pre and post consumer scrap must be part of their strategy. Not only can they then make claims about the recycled content of their products, but also they effectively reduce the greenhouse gas intensity of their entire range. While it is relatively straightforward to take back process scrap from immediate customers or return it suppliers, is more difficult for a company at the top of the supply chain to retain sight of its products as they are sold to consumers and then disposed of after use. Both pre and post consumer scrap are classified as ‘recycled’ according to EN 45557:2020 for calculating recycled content. So it makes sense to maximise the recycling of process scrap as a first step, before moving on to end of life material.
Companies are now also realising that they should take responsibility for their products throughout their life cycle including how they are recycled at end of life. This is likely to mean changes to supply chains. As in other sectors, some primary aluminium providers are acquiring recyclers and collectors to secure supply, and then applying their skills to produce blends/alloys, which conform to customer needs. Studies have explored the implications of fundamental changes to value chains in the metals industry. For example, according to a World Economic Forum report , it could become more profitable and sustainable to reposition a business as “providers of metals” derived from mining, recycling and reuse rather than as a pure mining or metals company.
Europe needs to step up recycling. Currently, significant quantities of scrap aluminium are exported, mainly to Asia. This is replaced in European manufacturing by imported primary aluminium. But even if Europe manages to reprocess all of its own scrap, we will still need primary aluminium to respond to the increasing demand for aluminium for energy efficient buildings and lightweight vehicles. Europe is a successful exporter of high value aluminium products including cars, boats, and aircraft. In fact, the EU exports more cars than it imports. So this surplus of aluminium containing exports over imports is yet another factor driving demand for imported primary aluminium.
Much of the imported primary material comes from China, which uses coal as a source of energy to produce aluminium with the highest carbon footprint. European Aluminium indicates that in 2017, around 900 thousand tonnes of scrap were exported. If Europe recycled all of its own aluminium scrap rather than exporting it, imports of primary aluminium would be reduced by about 24% and 9 million tonnes of CO2 emissions would be avoided.
European Aluminium has recently published a Circular Aluminium Action Plan for optimising recycling in Europe. It includes regulatory measures to promote the retention of aluminium scrap in Europe. The industry points to foreign recyclers who don’t work to the same standards as European ones, as part of the problem. There are calls for a mandatory EU certification scheme for all recyclers, with third party verification to guarantee compliance with EU environmental standards. These measures will certainly help, but companies in the value chain should be making more efforts themselves to promote the collection of their products at the end of their life, because there may be wider trade implications in the future.
Measures under discussion by the European Commission, to implement a net zero economy will have far reaching ramifications. A ‘carbon border tax’ is one example of the new measures proposed and it is rising up the political agenda. Europe has already recognised the problem of carbon leakage, which occurs when carbon intensive manufacturing is displaced to countries with weaker environmental safeguards, only for the products to be imported back into Europe. The carbon border tax removes that advantage from carbon intensive imports. Different variants have been proposed; average sectoral emissions of European producers could be used as a baseline or importers could prove that their products’ actual emissions performance is better than the average. But all are likely to have the effect of making scrap and recycled aluminium an attractive way of reducing the carbon intensity of foreign products targeted at EU markets.
Aluminium is key to the future of lightweight, carbon efficient transport and European companies have developed some of the alloys needed to optimise performance. The aluminium content of these cars, boats and aircraft needs to be brought back at the end of their life so it can be used again to manufacture more of the same. A report from the International Aluminium Institute predicts the increasing use of both primary and recycled aluminium in vehicles produced in China. It would logical for China to use that recycled aluminium as a way of minimising a carbon border tax on imports to Europe.
So European cast houses, semi fabricators and their customers should be thinking about gaining access to their own or their competitors scrap and end-of-life aluminium alloys, even if they have been exported to other countries. The lifetime of aluminium in vehicles is at least ten years and in buildings even longer, so there are those who will argue that it is too early to make changes. Nevertheless companies should be aware of the potential for foreign competitors to gain an advantage by recycling Europe’s scrap back to its consumers as high value imports. And those who act first are more likely to get ahead of the curve in a circular economy.
This article was first published in Aluminium International Today and updated on 30 June 20
Published: 30 June 20
