Net Zero Industry Tracker 2024 Aluminium

Performance The sector currently accounts for 2% of global CO2e emissions. As much as 60% of process emissions stem from electricity consumption, while 16% come from the fossil fuels used for thermal energy.423 Thus, the electricity mix used, especially for smelting, is a critical driver for emission intensity. Aluminium industry performance TABLE 14 Performance metric Change (2019-2023) Industry output +14.2%424 Emission intensity -13.6%425 Total CO2e emissions -1.3%426 In the 2019-2023 period, demand increased by 14.2% while emission intensity decreased by 13.6%. The reduction in emission intensity is primarily due to: 1. Reduced coal consumption: Coal remains the largest contributor to the power mix used for aluminium, but the sector has seen a steady decrease in recent years, especially in China, where over half of global aluminium is produced. As major manufacturing countries reduce coal reliance and switch to renewable energy and less carbon-intense fuels, this will continue be a key driver in reducing emissions intensity. 2. Higher rates of recycling: Secondary aluminium production is steadily increasing in the industry, which uses less energy than primary aluminium. Scrap recycling rates are at an all- time high and are expected to continue to rise. The smelting power mix still relies on fossil fuels for 61% of the power used and 39% from renewable sources (including hydropower). Coal represented 50% of the power mix in 2023, down from 57% in 2021, with the displaced coal primarily replaced by renewable energy.427 The smelting power mix trajectory has been promising and is expected to eliminate the majority of Scope 2 emissions. However, Scope 1 emissions are primarily in refining and process-related emissions, which have been relatively stable in recent years since the technologies required to decarbonize these processes remain nascent (e.g. hydrogen and CCUS). Several leading aluminium producers are testing breakthrough technologies, often in partnership. Examples include the Rio Tinto and Alcoa collaboration on inert anodes in Canada with support from Innovation, Science and Economic Development Canada (ISED); pilot tests on the use of hydrogen instead of fuels in alumina refining funded by the Australian Renewable Energy Agency (ARENA); and Norway-based company Hydro’s attempts to use the carbochlorination process to produce zero-carbon aluminium, which is supported by the Norwegian government via state enterprise Enova. Primary production has an energy intensity of 70 GJ per tonne, making it more energy-demanding than steel and cement. In contrast, secondary aluminium uses only 5% of the energy required in primary production.428 Additionally, secondary aluminium is often cheaper from a process perspective – the challenge remains twofold: increasing scrap rate collection, which is currently at 70%, and removing impurities or alloying elements. Obvious limitations to growing secondary production are limited scrap availability, quality and segregation, and the fact that primary production is superior in technical specifications critical for certain industrial applications of aluminium. Net-Zero Industry Tracker: 2024 Edition 4