Low-Carbon Aluminum and How Commodities Can Do More for Climate
As everyone around the world who cares passionately about climate change knows, America is back! Through the commitment of President Joe Biden and under the leadership of Special Presidential Envoy for Climate John Kerry, the US is helping lead the charge toward reducing global emissions. In Milan recently, Secretary Kerry opined that this could be the "decisive decade" in making crucial emissions reductions, noting that the upcoming COP26 in Glasgow could be the turning point in climate progress. The science, according to Secretary Kerry, says we must achieve close to a 45% reduction over the next ten years to make real change.
COP26 presents a golden opportunity for the world's leading economies to coalesce around climate change solutions, setting aspirational goals that move the needle. To accomplish this, Secretary Kerry has pointed out, major nations must "stretch to do more." So must the world's leading companies.
"...the production of aluminum is an energy-intensive process, meaning decarbonization of our sector can yield tremendous progress in reducing global emissions."
I spent years in government as the United Kingdom's Minister of State for Climate Change, during a period in which like-minded countries were all working hard to make the Paris COP a successful step forward. In the last years, I've served as Chairman of a company and a voice in an aluminum industry where private sector progress is essential to keeping the promise of Paris -- to not exceed 1.5 degrees of warming -- alive. Our company, the En+ Group, produces low-carbon aluminum and is committed to being part of the solution, pledging to reach net-zero greenhouse gas emissions by 2050, with a mid-term reduction target of at least 35% by 2030. This is the most ambitious target ever set by a global aluminum manufacturer. We're not just talking about reducing our carbon footprint -- we're taking tangible steps to ensure progress.
Why? Because the production of aluminum is an energy-intensive process, meaning decarbonization of our sector can yield tremendous progress in reducing global emissions. This is critical because to date, many of the greatest carbon reduction commitments have come from smaller emitters, mostly retail and service businesses. While these commitments help, we'll need energy-intensive sectors to do much more.
"While few consumers think about the origin of the aluminum in the products they purchase, they should ... aluminum production consumes 4% of the world's power production and is responsible for more than 3% of global carbon emissions."
The challenge of decarbonizing aluminum production is daunting. Today, nearly 60% of the world's aluminum comes from China, which happens to be the most polluting aluminum produced. For comparison, En+ Group's low-carbon approach yields just 2.6 tons of CO2 per ton of aluminum, while most primary aluminum -- including Chinese aluminum -- averages 16.5 tons, or nearly seven times more. While few consumers think about the origin of the aluminum in the products they purchase, they should. Increasing the focus on low-carbon aluminum is important, as is developing labels that identify the environmental impact of such energy-intensive commodities which can help consumers make smarter choices for the planet.
Building a truly green economy relies on this kind of consumer empowerment through education, but it won't happen without market players such as the London Metal Exchange (LME) stepping in and enforcing such measures. LME has signaled its support for greater transparency by launching a low-carbon aluminum trading platform, but there is more work to be done.
"If our industry produced all of its aluminum by 2050 in low-carbon form, we would reduce emissions by 62%..."
TheEnplus: En+ Group Executive Chairman Lord Barker fireside chat with CNBC's Emma Crosby at Davos, January 29, 2020.
The timing is important. Aluminum finds itself at a crossroads at which it can embrace a low-carbon future as the metal of tomorrow or remain stuck on the wrong side of history. This looms large, as aluminum production consumes 4% of the world's power production and is responsible for more than 3% of global carbon emissions. At the moment, the numbers are headed in the wrong direction. In 1990, for example, the industry produced 350 million tons of CO2. Today it produces 1.2 billion tons of CO2, or the equivalent of all emissions produced by Japan annually.
Those staggering figures are cause for optimism though. If our industry produced all of its aluminum by 2050 in low-carbon form, we would reduce emissions by 62%, and align the industry with the Paris Agreement.
En+ Group is proving we can meet the challenge. In September, we launched our Pathway to Net Zero Report to decarbonize aluminum. The report's measures will reduce En+ Group's absolute GHG emissions by at least 60% from current levels by 2050, providing a roadmap for other producers in our sector who choose to be partners in the fight against climate change.
"The upcoming COP26 in Glasgow presents a strong opportunity to focus on hard-to-abate sectors like ours. With demand for aluminum expected to increase, now is the time for the industry to focus on low-carbon aluminum..."
Our overall net-zero roadmap presents a holistic approach to emissions reductions. We focus on emissions abatement by implementing technologies that prevent emissions, including shifting to pre-baked anode and inert anode technologies for smelters and transitioning to liquefied natural gas and green hydrogen, or using renewable power for heating processes. We'll avoid emissions by increasing hydropower generation up to 2.5 terawatt-hours per year, meaning more than 98% of the electricity we need will come from carbon-free or low-carbon power sources, mostly large-scale hydropower stations. Similarly, our program of compensation and neutralization will consider technologies such as carbon capture, utilization, and storage as a way of compensating for emissions in the value chain that can't be eliminated by abatement measures. Finally, we are committed to transparency and data-led disclosure regarding our progress, creating accountability for the progress we’re making.
The upcoming COP26 in Glasgow presents a strong opportunity to focus on hard-to-abate sectors like ours. With demand for aluminum expected to increase, now is the time for the industry to focus on low-carbon aluminum, investing in innovation, technology, and partnerships to meet the shared challenge of climate change.