As world leaders gear up for the United Nations Climate Change Conference to be held in Paris in early December, it’s high time we focus our energy on discussing how the Conference can transform the global aluminum industry into a sustainable player in our future.
Aluminum is such a widely used yet energy intensive material. It is used in everything from soda cans, to Apple products, to Ford’s F-150 100 percent aluminum made pickup trucks, and its use is only set to grow in the future. However, while some countries actively work on containing the environmental footprint of aluminum production, others have purposefully suppressed efforts to curb their carbon emissions, creating a major worldwide imbalance in the sustainability of aluminum production, a trend the COP21 should seek to counter.
The problem of high-energy consumption in the manufacture of aluminum has long been an issue that has plagued the industry. It takes roughly ten times the energy to produce aluminum as it does to produce the same amount of steel. Although in the Western Hemisphere and Europe most of that energy is derived from hydroelectricity, some nations can use up ten times as much coal to smelt aluminum to match the hydroelectric sources energy output, and the world as a whole uses fossil fuels twice as much as it does sustainable hydroelectricity to power aluminum production. Related: Turbulent Times For The Copper Markets
Iceland, Norway and Russia have been key players in promoting a sustainable aluminum industry by using hydropower for the production process. Roughly thirty percent of the cost of production of aluminum is associated with electricity costs, therefore the use of renewable energy such as hydropower goes a long way in ensuring an environmentally clean production process and hence less carbon emissions. European nations have seen their industries support such long-term clean energy solutions.
Iceland is a model case for sustainability in the aluminum industry. Aluminum smelting is the biggest industry in Iceland, accounting for roughly 2.9 percent of GDP. Because of the abundance of cheap and sustainable hydroelectric energy, the production of hydroelectric energy has developed hand-in-hand with the aluminum-smelting industry on the Scandinavian island – the tremendous energy demands of the industry have driven the country to build hydroelectric dams, which, in turn, has attracted more aluminum smelting.
Norway is the world’s fifth-largest producer of aluminum and Norsk Hydro ASA, the country’s biggest aluminum producer, has used sustainable hydroelectric sources for its energy requirements since the company began smelting aluminum in 1963. It has continued to push for increased sustainable and environmentally responsible aluminum production for the industry up to the present day, including a pledge to become carbon neutral by the end of this decade.
For its part, Russia has been increasing investment in hydroelectric power, with the world’s second largest aluminum company, UC Rusal, teaming up with RusHydro and Boguchany Energy and Metals Complex (BEMO) to complete the $2.6 billion Boguchany hydroelectric power plant, which will provide energy for the Boguchany aluminum smelter in Krasnoyarsk Krai, Siberia. Related: Current Oil Price Rally Will Fizzle Out Say Analysts
Meanwhile countries like China and Australia have been largely reliant on coal to power their aluminum smelters, emitting large amounts of carbon and polluting the environment, while putting up resistance to any environmental regulations that could harm their industries.
Underscoring the implications of China’s reliance on coal-based aluminum production on carbon dioxide emissions, Chief Executive of Norsk Hydro, Svein Richard Brandtzaeg has claimed that, "if what we produce in Norway was replaced by a million tons in China, then global emissions would rise by 13-14 million tons per year. That is quite a big chunk.”
Similarly, Australia’s aluminum lobby has actively fought efforts to meet renewable energy targets and continues to insist on the unsustainable and environmentally dirty use of fossil fuels. Already the biggest per capita greenhouse gas polluter in the developed world, the aluminum industry has been either exempt or contemplated for exemption in some of Australia’s major environmental legislation.
Although a renewable energy target (RET) legislative regime was passed into law in 2009, the aluminum lobby won an agreement from both major parties to grant the industry an exception, citing the AUS$80 million per annum cost to the industry, hobbling its competitiveness in the face of cleaner “coal-free global rivals.” Related: Airstrikes Have Yet To Stop ISIS Oil Industry
Without a global and binding agreement on climate change at the COP21, one that will see all nations adhere to strict carbon emissions reductions and investment in cleaner and more efficient technologies, Europe’s greener aluminum industries risk losing investment to countries in Asia and the Middle East, which are marketing themselves as favourable business destinations but have significantly weaker environmental rules.
Not only would such a situation be harmful to aluminum producers that have been promoting a more sustainable industry, but it will also result in carbon emissions and pollution merely being dumped onto other nations, effectively undermining a global regime for the reduction of carbon emissions. Despite its high energy costs, cleaner power can play a huge role in promoting a sustainable aluminum industry and curbing greenhouse gas emissions, and is often favoured by environmentalists due its ability to be easily recycled.
As aluminum becomes the preferred choice for manufacturing cars, ships and other transport due to its light weight, the COP21 can succeed in ensuring that there are global standards and regulations for the industry, which would guarantee a more sustainable and cleaner sector for future generations.
By Christopher Stakhovsky for Oilprice.com
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