Aluminium

More efforts needed
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In this report

The direct CO2 intensity of aluminium production remained relatively flat in 2018, as it has since 2014. According to the SDS, however, emissions intensity must decline by 1.5% annually to 2030. Getting on track with the SDS will require improved end-of-life scrap collection and sorting to enable greater production from scrap, and further development of new technologies to reduce emissions from primary production. Governments can stimulate action by better co-ordinating aluminium scrap collection and sorting, funding RD&D and adopting mandatory CO2 emissions reduction policies.

Direct CO2 intensity of aluminium production, 2000-2018

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Tracking progress

Primary aluminium production is highly energy-intensive, with electricity making up a large share of the energy consumed. Getting on track with the Sustainable Development Scenario (SDS) will require efforts on multiple fronts.

Material efficiency strategies can help maximise the collection of post-consumer scrap to enable greater secondary production and reduce the total amount of metal used while delivering the same services.

R&D is needed on innovative alternative production methods that reduce primary production process and combustion emissions, and more energy-efficient equipment and operations would be beneficial.

Given the considerable amount of electricity consumed in the aluminium subsector, decarbonising the power sources would help reduce indirect emissions and is thus a key complement to reducing direct aluminium emissions. 

Global energy intensity of overall aluminium production fell by 1.2% in 2018, consistent with average annual reductions of 1.2% in 2010‑17. This includes both primary production from bauxite ore and secondary production from scrap. Primary production is approximately ten times more energy-intensive than secondary production. 

Primary aluminium production involves two key steps: alumina refining, to refine bauxite ore into alumina (aluminium oxide), and aluminium smelting, to convert alumina to pure aluminium.

The drop in alumina refining energy intensity was less in 2018 (‑1.8%) than during 2010‑17 (average ‑3.0% per year); aluminium smelting also decreased at a slightly lower rate (-0.4%) compared with the 2010-17 average (-0.6%). The downward trend in both in recent years is the result of new capacity additions equipped with the best available energy-efficient technologies. Reductions in primary production energy intensity are thus the main reason for these recent declines in overall aluminium energy intensity.

Falling global energy intensity of alumina refining and primary aluminium smelting from 2010 to 2018 resulted largely from developments in China. Capacity expanded significantly in recent years, such that China accounted for more than half of global primary production in 2018. This enabled robust energy intensity declines and has put China’s average aluminium smelting energy intensity at the best-available-technology performance level since 2014.

Electricity intensity of primary aluminium smelting by region, 2000-2018

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Energy intensity of alumina refining by region, 2000-2018

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The proportion of aluminium produced from recycled metal (secondary production) also affects the overall average energy intensity of aluminium production. In 2018, 33% of aluminium produced came from new and old scrap, of which 60% was from old scrap (new and old scrap includes product manufacturing and end-of-life scrap, not internal scrap produced in aluminium fabrication facilities). The share of secondary production has remained relatively constant at close to 32% since 2000, except for a small temporary decline around 2007.

Scrap-based production tends to cost less than primary production, so the key constraint is scrap availability. In 2018, collection rates for aluminium were over 95% for new scrap and 71% for old. While these rates are high, there is potential to improve old-scrap collection. Still, aluminium remains locked in products until their end of life, so even with better collection rates there is an upper limit on potential for recycled production.

For alignment with the SDS, it will be important to continue reducing the energy intensities of primary and secondary aluminium production, and to expand secondary production by improving old-scrap collection and sorting, as well as reducing losses within the recycling system. 

The global energy intensity of aluminium production overall (primary and secondary combined) needs to fall at least at 1.2% annually to 2030, similar to the average annual rate of decline since 2010.

An increasing share of secondary production will be the primary catalyst of energy intensity improvements. The combined share of aluminium produced from recycled new and old scrap needs to reach nearly 40% (at least 70% of this from old scrap) by 2030 to attain the SDS pathway. Achieving this share will require better scrap collection and sorting, particularly for old scrap, since stronger material efficiency efforts under the SDS will reduce the availability of new scrap.

If the aluminium emissions boundary is enlarged to include indirect emissions from power generated for use in aluminium production, those power emissions would currently account for roughly 70% of total (direct plus indirect) global aluminium emissions.

A considerable portion of these emissions are within the control of the aluminium industry, given that about 60% of power consumed by the industry globally is self-generated rather than purchased from the grid. The share of self-generation is particularly high in Asia (about 75% in China and close to 100% in the rest of Asia), and moderate in North and South America (about 50%). Meanwhile, most aluminium production power is purchased in Europe, Africa and Oceania.

The average world power mix supplying the aluminium industry differs considerably from the average total global power mix. Hydropower is currently used for 25% of global aluminium production – even though it accounts for only 15% of the total power mix – but this share has fallen since 2010, when 40% of aluminium production was fuelled by hydropower. The shift is largely due to expanding aluminium production in China powered by coal-based electricity, where coal supplies 90% of production. Meanwhile, in Europe, North America and South America, hydro still supplies greater than 75% of production.

In the SDS, the emissions intensity of the total power mix declines by nearly 25% from today’s level by 2030. The aluminium industry should aim to reduce the intensity of its power supply by at least this much, including by reducing reliance on coal-generated power.

Global aluminium industry power mix compared with the global total power mix, 2010 and 2018

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Global aluminium production increased an estimated 2.5% in 2018, a lower rate than the average of 6% per year registered in 2010-17. Production is expected to continue expanding, driven by population and GDP growth. Clean energy transitions will also impact aluminium demand, with potential for upward pressure from technology shifts that require greater use of aluminium, e.g. for lightweight vehicles and solar energy.1

Adopting material efficiency measures can help curb demand growth, however. Examples include reducing scrap generation during fabrication and manufacturing, reusing old scrap, and designing products with recycling in mind. In the SDS, demand growth slows to an average annual rate of 1.2%, but this still represents over 15% growth in total demand from the current level. Measures will therefore be needed to curb rises in energy and emissions intensities.

Global aluminium production in the Sustainable Development Scenario, 2010-2030

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Although energy efficiency and scrap-based production are important for alignment with the SDS, on their own they cannot decarbonise the subsector. Transformational change is required, particularly to deal with process emissions from primary production, and the groundwork for breakthrough technologies needs to be laid before 2030.

Some good progress has been made on this front in recent years. Currently, primary aluminium smelting relies on carbon anodes, which produce CO2 as they degrade. Innovation efforts are under way to develop inert anodes, which are made from alternative materials, do not degrade, and produce pure oxygen rather than CO2. Two key initiatives have made considerable progress in the past couple of years:

  • In 2018, Alcoa and Rio Tinto announced they have developed an inert anode technology and have formed a joint venture called Elysis to further develop the technology. Construction of its research centre in Canada, where it plans to commercialise the technology, began in mid-2019. They are aiming to make their technology available to retrofit existing smelters starting in 2024.
  • RUSAL's Krasnoyarsk plant in Russia has produced primary aluminium using inert anode technology at an industrial scale (2 kt). The company is targeting mass-scale production by 2023.

Another area of innovation is adapting aluminium production to provide flexibility to the power grid, given that aluminium smelters are large electricity consumers. This will become increasingly important as the share of variable renewable power rises. TRIMET is currently operating an industrial-scale pilot of the EnPot demand-response technology in 12 pots at its plant in Essen, Germany. This “virtual battery” concept relies on installing adjustable heat exchangers that can maintain the energy balance in each electrolytic cell irrespective of shifting power inputs.

Furthermore, it will be important to develop alternative ways to produce heat for alumina refining, which currently runs primarily on fossil fuels. The use of 30% biomass has been successfully tested in Australia, while a consortium – also in Australia – is working to obtain 50% of energy from concentrating solar power.

Expanding secondary production through better scrap collection and sorting will be important to raise energy efficiency and decarbonise the aluminium subsector.

Stakeholders should work to increase scrap collection and recovery by improving recycling channels and sorting methods, and by better connecting participants along supply chains. Focusing on end uses that currently have low collection rates will be important.

The aluminium industry, aluminium product manufacturers and waste collectors can work together to ensure that manufacturing and end-of-life scrap is channelled back to aluminium producers. Engineers should consider reusability and recyclability in product design, and governments can assist by setting requirements and co‑ordinating channels for end-of-life material reuse and recycling.

Participants all along the value chain (aluminium producers, engineers, construction companies and product manufacturers) can also adopt material efficiency strategies to reduce overall aluminium demand.

Furthermore, ensuring efficient equipment operations and maintenance will help guarantee optimal energy performance. This can be reinforced by implementing energy management systems.

Reducing emissions from primary production is important, as scrap availability will put an upper limit on the potential for secondary production.

Industry should prioritise RD&D of alternative production methods that reduce process emissions from primary production, such as the use of inert anodes. R&D will be needed within the next decade to enable widespread deployment post-2030.

Increased support for RD&D is needed from governments and financial investors, particularly to advance the large-scale demonstration and deployment of technologies that have already shown promise.

Public-private partnerships can help, as can green public procurement and contracts for difference that generate early demand and can enable producers to gain experience and bring down costs. Government co‑ordination of stakeholder efforts can also direct focus to priority areas and avoid overlap.

Given the high electricity requirements of aluminium production, efforts to decarbonise the grid will be necessary to reduce the subsector’s indirect emissions.

The aluminium subsector can in turn assist with grid decarbonisation by providing flexibility services that would help integrate a higher portion of variable renewables. Electricity producers can assist by offering electricity pricing incentives to aluminium producers using demand management systems.

Policy makers can promote CO2 emissions reduction efforts by adopting mandatory reduction policies, such as a gradually rising carbon price or tradeable industry performance standards that require the average CO2 intensity for production of each key material to decline across the economy and that permit regulated entities to trade compliance credits.

Adopting these policies at lower stringencies in the short term (i.e. within the next three to five years) will provide an early market signal, enabling industries to prepare and adapt as stringency increases over time. It can also help reduce the costs of low-carbon production methods, softening the impact on aluminium prices in the long term.

Complementary measures may be useful in the short to medium term, such as differentiated market requirements (i.e. a government-mandated minimum proportion of low-emission aluminium in targeted products).

Ideally, these policies would be applied globally at similar strengths. Since aluminium is highly traded, measures will be needed to help ensure a level playing field if the strength of policy efforts differs from one region to another. Possibilities include adopting border carbon adjustments or the free allocation of allowances for emissions below a targeted benchmark in an emissions trading system.

Governments can extend the reach of their efforts by partaking in multilateral forums to facilitate low-carbon technology transfer and to encourage other countries to also adopt mandatory CO2 emissions policies.

Improving the collection, transparency and accessibility of energy performance and CO2 emissions statistics on the aluminium subsector would facilitate research, regulatory and monitoring efforts (including, for example, multi-country performance benchmarking assessments).

Better data on recycled production levels, recycled energy intensities and scrap availability are particularly needed. Industry participation and government co‑ordination will both be important to improve data collection and reporting.

Resources
Acknowledgements

External reviewers: Chris Bayliss (International Aluminium Institute).

References
  1. Solar energy systems use aluminium for various components, including for mounting and framing solar PV panels and for reflectors in concentrating solar power systems.

  2. IAI (International Aluminium Institute) (2020), Current IAI Statistics, http://www.world-aluminium.org/statistics/.