We all have experienced the prevailing heat wave during the hottest month in the history of humanity, July 2023. It made some of us realise that if we do not mend our ways and start thinking about the broader group of people, it won't be long before some of our civilisations will forever get lost in oblivion. The melting of icebergs and the rising water levels have somehow indicated that there has been a considerable fluctuation in the global climatic conditions. The gradual rise in Earth's temperature can be attributed to CFCs or direct carbon emissions and other industry-related fumes.
The aluminium industry is highly energy-intensive, and the conventional process of primary aluminium production releases 95% more CO2 than the production of recycled aluminium. That is why many leading aluminium producers are seeking new methods of transforming their flagship production line into a greener and more sustainable one. A study suggests recycling post-consumer aluminium saves 90 million tonnes of CO2 and 100k GWh of energy, equal to the Netherlands' annual electricity use.
In 2022, the world's consumption of primary and recycled aluminium increased by approximately 1.9 per cent to reach 95.3 million tonnes. Over the past decade, the demand for recycled aluminium has grown steadily. While the overall market for aluminium is expected to increase by approximately 1.8 per cent in 2023, the demand for recycled aluminium is projected to grow at a rate of about 4.2 per cent. As per industry analysis, this growth can be primarily proportional to the augmented demand for electric vehicles (EVs). In an attempt to make the electric vehicle sector sustainable and carbon-free, car companies are advocating the use of recycled aluminium in their flagship models. Other than that, the EV batteries also lay a giant foreground for recycling activities, as the critical minerals used in the composition need to be retrieved to induce a profound material loop.
If we try to define the sustainability quotient of aluminium products, the origin of the raw material should be thoroughly checked first. Though we have global organisations like the Aluminium Stewardship Initiative or ASI that inspects and certifies raw material before it gets circulated, low-carbon aluminium can be precisely separated into two different groups:
Both these variants have shallow carbon content as the origins are pretty simple, and the process of remelting aluminium doesn't require much energy or physical labour. Aluminium is 100% recyclable, and its infinite transformational property is the only reason why it appeals to businesses travelling towards a circular economy.
With the influx in the usage of low-carbon aluminium for a Net-Zero economy, international conglomerates are planning the construction of massive renewable energy projects. The primary sources of renewable energy are wind, hydel or solar power. In recent years, we have seen an enormous surge in new renewable energy projects, eyeing the constantly rising demand for low-carbon products. Energy companies are innovating ways of flooding regional power grids with ample energy output for uninterrupted industrial propagation. The global metal industry suffered back-to-back blows due to COVID-19, the Russia-Ukraine crisis and now the Israel-Palestinian war, but somewhere, we can also say all these unprecedented situations made the aluminium industry stronger as it found new ways to cope with the dilemmas in the sector. The Paris Environmental Act of 2015 can be considered the turning point for the aluminium industry, and now, the 28th UN Climate Change Conference of the Parties, or COP28, marks another crucial gathering of nations to address pressing environmental issues. In the context of the aluminium industry, this conference holds significant importance. From the inception of sustainable ideation, the aluminium sector has been under increasing scrutiny due to its energy-intensive processes and environmental impact.
Solar and wind energy have emerged as promising alternatives for powering aluminium smelting operations. However, their intermittent nature poses a challenge that can be overcome through innovative storage solutions, ensuring a continuous and reliable energy supply. By embracing renewable energy, the aluminium sector not only reduces its carbon footprint but also positions itself as a leader in sustainable practices. This aligns with the global commitment to combat climate change and promotes a cleaner, greener future.
Another significant source of renewable energy is green hydrogen. Green hydrogen is produced through a process called electrolysis using renewable energy sources. This clean energy source is gaining popularity, especially in the smelting stage, where traditional methods rely heavily on fossil fuels, thus contributing to the industry's carbon footprint. By replacing fossil fuels with green hydrogen, the sector can substantially reduce its carbon emissions while also enhancing operational efficiency with a reliable and consistent energy source. Overall, green hydrogen presents a promising solution for the aluminium industry to achieve its sustainability goals.
Some of the most revered projects in the renewable energy sector have been listed below:
GenHydro's alliance with RPG Energy Group and EREN Group: GenHydro and RPG Energy Group have partnered to deploy on-site commercial-scale renewable energy power plants to accelerate decarbonisation goals for various industries worldwide. By combining GenHydro's innovative technology that converts waste aluminium into high-value, renewable products using steam with RPG's solutions and background in renewables and the construction industry, the two companies hope to develop the most advanced renewable energy and hydrogen production system of its kind at a commercial scale.
GenHydro and EREN Groupe have also formed a strategic alliance to improve the accessibility and cost-effectiveness of green hydrogen in Germany and France. GenHydro will work with EREN Groupe to introduce new and innovative green hydrogen production systems and renewable energy technology in various locations.
Hydro Energi and Fortum: Hydro Energi AS has signed a 13-year contract with Fortum to supply 0.44 TWh per year of energy to Hydro's Norwegian aluminium plants from 2024 to 2036. The agreement will help Hydro to continue producing low-carbon aluminium and achieve its zero-carbon emission goals by 2050. Fortum is known for having the cleanest energy in Europe and will supply 5.7 TWh of power to Hydro's plants in price area NO3 over the 13-year period. The new contract is part of Hydro's Nordic power portfolio, which has a captive power production capacity of 9.4 TWh per year and a long-term contract portfolio of around 10 TWh.
Atlas Renewable Energy, Hydro Rein collaborates: Albras Alumínio Brasileiro S.A. (ALBRAS), the largest producer of primary aluminium in Brazil, will procure power from a new 438-MW solar power plant to supply its smelter in the state of Para, Brazil. The solar plant is being built by a joint venture between Actis Group and Atlas Renewable Energy along with Hydro Rein. The Boa Sorte solar park in Paracatu, Minas Gerais, will comprise over 800,000 bifacial modules and generate 815 GWh of electricity, which will be purchased by Albras as part of a power purchase agreement (PPA) in US dollars from 2025 to 2044. The contracted volume will be sufficient to cover 12% of Albras' annual power needs. The project is expected to begin the erection phase in Q4 2022 and be completed on or before Q4 2023.
Adani Group's 10GW solar unit: Adani Group plans to expand its solar manufacturing business to meet the growing demand for solar panels in India and worldwide. The conglomerate aims to build 10 GW of solar manufacturing capacity by 2027, with the new manufacturing capacity to be set up at Adani's Mundra Special Economic Zone in Gujarat. Currently, Adani's solar manufacturing capacity is at 4 GW. Adani Solar has secured a robust order book of over 3,000 MW in exports, which is projected to be serviced within the next 15 months. The company is committed to a greener tomorrow and is embarking on a groundbreaking project in Mundra, Gujarat, to build the world's first fully integrated 10 GW solar manufacturing ecosystem by 2027.
Ayana Renewable and Hindalco: Ayana Renewable Power has signed a Power Purchase Agreement with Hindalco Industries Limited to supply 100 MW of round-the-clock renewable energy to Hindalco's smelters in Odisha. The project is supported by the National Infrastructure and Investment Fund, British International Investment, and Green Growth Equity Fund. This project reinforces Ayana's position as a leader in India's energy transition landscape, increasing its cumulative capacity under management to nearly 5 GW. The CEO of Ayana Renewable Power, Shivanand Nimbargi, emphasised that delivering 100 MW of uninterrupted, carbon-free power round the clock is a milestone for the company.
China's SPIC directs first green power trade: State Power Investment Aluminum and Power Company (SPIC) has completed the first electrolytic aluminium industry in Ningxia, China. This green power transaction involves a volume of 9 million kWh and positively impacts the environment by significantly reducing carbon dioxide emissions, sulphur dioxide, and nitrogen oxides. The company plans to increase the proportion of green electricity transactions to achieve carbon neutrality in the electrolytic aluminium industry.
EGA investing in renewable energy: Emirates Global Aluminium (EGA) plans to expand the midstream and downstream aluminium industry, such as auto spare parts, to meet the growing global aluminium demand. For that, EGA is investing in a Dh4 billion waste-to-energy project, which will convert 1.9 million tonnes of waste per year into renewable energy, generating 200 megawatts of electricity to accelerate aluminium production. A recent study predicts that the demand for aluminium will grow by almost 40% to 119.5 million tonnes by the end of 2030, primarily driven by the transportation, construction, packaging, and electrical sectors.
Alcoa expedites clean energy transition: Alcoa, the US-based global aluminium company, is accelerating its shift to clean energy at its Juruti bauxite mine in Brazil. The company aims to replace diesel-powered generators with hydroelectric sources of a capacity of 10MW by building a 51-kilometre transmission line and substation. This project is expected to cut greenhouse gas emissions by around 35% and reduce plant energy costs by half in the future. Alcoa also aims to reduce greenhouse gas emissions by 30% by 2025 and 50% by 2030 to reach net zero emissions in its global operations by 2050.
Possibility of Tiwai recuperation with green energy: Fortescue Future Industries (FFI) has claimed that green hydrogen power generation in Southland will increase, resulting in no scarcity of electricity and reduced household bills. FFI leads its customers by developing a portfolio of renewable energy and green hydrogen projects. Although there were shutdown threats by Rio Tinto, the Tiwai Point aluminium smelter may not stop operating in 2024, but it will still need vast amounts of power from the Manapouri Hydro station. Felicity Underhill, the Director for Fortescue Future Industries, New Zealand, said, "Green hydrogen was flexible enough to still work." Southland is a potential hydrogen production hub in New Zealand, as assessed by the Fortescue Future Industries.
Baotou Aluminum's two new renewable energy projects:
Baotou Aluminum Industrial Park Green Power Supply Project and the Baotou Aluminum Coal-fired Power Plant Renewable Energy Alternative Project have been approved by the Inner Mongolia Autonomous Region Energy Bureau. The combined installed capacity of these two projects is 2.1 million kilowatts, with 1.9 million kilowatts coming from wind power and 200,000 kilowatts from photovoltaic sources. The integration of new energy is expected to increase the company's proportion of green electricity to over 40% and will decrease annual carbon dioxide emissions by 5.96 million tonnes. This will help cultivate and develop new momentum and enhance new competitive measures.
In conclusion, it must be mentioned that even though the transition towards Net-Zero carbon emissions is amplifying day by day, the entire process is a bit complicated. Most of the existing aluminium smelters and operations rely on fossil fuels; thus, completely transforming those particular production lines might take some time. Moreover, renewable energy implementation is cost-effective, which is why only industry-leading businesses can afford to adopt it. And most importantly, renewable projects require a lot of space for a planned, highly productive layout. Most nations struggle to allocate a proper location for the foundation of this industry. Anyhow, companies from China, Sweden, and the USA, also to a great extent India, are ruling the renewable energy sector, with a huge propensity for smaller global operations to tap into regional energy power grids soon.
If you wish to learn more about the looming sustainable initiatives in the aluminium sector, spare some time on AL Circle's specially formulated report, Sustainability in the Global Aluminium Industry.
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