REACHINGZEROWITHRENEWABLES

ALUMINIUM

13

INDUSTRY

Al

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REACHINGZEROWITHRENEWABLES:ALUMINIUMINDUSTRY|

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?IRENA2025

Unlessotherwisestated,materialinthispublicationmaybefreelyused,shared,copied,reproduced,printedand/orstored,providedthatappropriateacknowledgementisgivenofIRENAasthesourceandcopyrightholder.Materialinthispublicationthatisattributedtothirdpartiesmaybesubjecttoseparatetermsofuseandrestrictions,andappropriatepermissionsfromthesethirdpartiesmayneedtobesecuredbeforeanyuseofsuchmaterial.

ISBN:978-92-9260-649-7

Citation:IRENA(2025),Reachingzerowithrenewables:Aluminiumindustry,InternationalRenewableEnergyAgency,AbuDhabi.

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AboutIRENA

TheInternationalRenewableEnergyAgency(IRENA)isanintergovernmentalorganisationthatsupportscountriesintheirtransitiontoasustainableenergyfuture,andservesastheprincipalplatformforinternationalco-operation,acentreofexcellence,andarepositoryofpolicy,technology,resourceandfinancialknowledgeonrenewableenergy.IRENApromotesthewidespreadadoptionandsustainableuseofallformsofrenewableenergy,includingbioenergy,geothermal,hydropower,ocean,solarandwindenergyinthepursuitofsustainabledevelopment,energyaccess,energysecurityandlow-carboneconomicgrowthandprosperity.

Acknowledgements

ThereportwasauthoredbyKaranKochharandLuisJaneiroundertheguidanceofFranciscoBoshellandRolandRoesch(Director,IRENAInnovationandTechnologyCentre).PernelleNunezandLinlinWu(InternationalAluminiumInstitute)providedsubstantialinputstothereport’sconcept,developmentandextensivefeedbackontheanalysis.

DrMartinIffert(EnergyPool,MartinIffertConsulting)providedsubstantialbackgroundinformationandfeedback.ZafarSamadov,AbdullahFahad,YongChen,AdrianGonzalezandSeanCollins(IRENA),andMarlenBertram(IAI)andMarghanitaJohnson(AustraliaAluminiumCouncil),providedvaluablereviews.IRENAisgratefultoIAI’sEnergyandEnvironmentCommitteeforitsfeeedbackontheinitialfindingsofthereport.

Thereportwascopy-editedbyJustinFrench-BrooksandtechnicalreviewwasprovidedbyPaulKomor.EditorialsupportwasprovidedbyFrancisFieldandStephanieClarke.DesignwasprovidedbyStrategicAgenda.

Disclaimer

Thispublicationandthematerialhereinareprovided“asis”.AllreasonableprecautionshavebeentakenbyIRENAtoverifythereliabilityofthematerialinthispublication.However,neitherIRENAnoranyofitsofficials,agents,dataorotherthird-partycontentprovidersprovidesawarrantyofanykind,eitherexpressedorimplied,andtheyacceptnoresponsibilityorliabilityforanyconsequenceofuseofthepublicationormaterialherein.

TheinformationcontainedhereindoesnotnecessarilyrepresenttheviewsofallMembersofIRENA.ThementionofspecificcompaniesorcertainprojectsorproductsdoesnotimplythattheyareendorsedorrecommendedbyIRENAinpreferencetoothersofasimilarnaturethatarenotmentioned.ThedesignationsemployedandthepresentationofmaterialhereindonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthelegalstatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.

Contents

Executivesummary 7

Introduction 11

Aluminiumproductionprocesses 13

Thealuminiumsectortoday 14

Environmentalrelevanceofthealuminiumsector 16

Energycostsensitivityinthealuminiumindustry 19

Transformationpillars:Towardsnetzerointhealuminiumsector 20

PillarI:Renewableenergysupplyforsmeltingandaluminarefining 22

PillarII:Maximisethepotentialofmaterialefficiencyandrecycledaluminium 42

PillarIII:Additionaldecarbonisationlevers 51

Acceleratingthetransitiontowardsnetzerointhealuminiumindustry 53

Recentprogressinthetransitionofthealuminiumindustry 54

Keyconsiderationsfordecisionmakers 55

Keyactionstoacceleratethetransitioninthealuminiumindustry 57

References 59

Figures

FigureS1

Keyareasofactiontodecarbonisethealuminiumsector

9

Figure1

Aluminiumvaluechain

13

Figure2

Historicalgrowthinprimaryaluminiumproduction

14

Figure3

Regionalmixofbauxite,aluminaandaluminiumproduction

15

Figure4

Regionalmixofaluminiumconsumption

15

Figure5

Breakdownofaluminiumdemandbyuse

16

Figure6

GHGemissionsfromprimaryaluminiumvaluechain

17

Figure7

Evolutionoffuelmixinaluminarefining(top)andpowermixinaluminiumsmelting(bottom)

18

Figure8

Shareofenergycostsasafractionoftotalproductioncostsinaluminarefiningandaluminium

smelting

19

Figure9

OverviewoffactorsoftheGHGimpactsofaluminiumsector,andpillarsfordecarbonisation

21

Figure10

Electricity-relatedemissionsinprimaryaluminiumproduction

2

2

Figure11

GlobalLCOEfromnewlycommissionedutility-scalerenewableenergytechnologies,2010-2023

24

Figure12

LCOEofutility-scalesolarPV(top)andonshorewind(below)comparedwithfossilfuel

generationinregionswithaluminiumsmeltingcapacityrespectively

25

Figure13

Annualpowergenerationcapacityadditions

26

Figure14

Globalpowergenerationmixandinstalledcapacitybyenergysource:PlannedEnergy

Scenarioand1.5°CScenarioin2020,2030and2050

27

Figure15

Modelsforsourcingrenewableelectricityforaluminiumsmelting

29

Figure16

Powersystemflexibilityenablers

31

Figure17

Schematicofflowsofelectricitytoanaluminiumsmelteroperatingwithrenewable

energyandstorage

3

3

Figure18

AveragehourlyoutputofasolarPVandsmelterloadperMWofcapacityinstalled

33

Figure19

LoaddurationcurveforsolarPVplantwithoutabatteryvssmelterloadforlocation1

34

Figure20

LoaddurationcurveforsolarPVplantwithabatteryvssmelterloadforlocation1

35

Figure21

AveragehourlyoutputofsolarPVandonshorewindplantsvssmelterloadperMW

ofcapacityinstalled

3

6

Figure22

LoaddurationcurveforthesolarPV,windplantwithoutabatteryandthesmelterforlocation2

36

Figure23

LoaddurationcurveforthesolarPV,windplantwithabatteryandthesmelterforlocation2

37

Figure24Systemicinnovationapproaches 3

8

Figure25RefiningbauxitetoaluminausingtheBayerprocess 40

Figure26Resourceandeconomicefficiencyinaluminium 42

Figure27Shareofscrapinaluminiumproductionin2021 47

Figure28Potentialroleofrecyclinginfuturealuminiumproduction 48

Figure29Roleofrecyclingandmaterialefficiencymeasuresinaluminiumsectorin2050 50

Figure30Energyintensityofmetallurgicalaluminarefining(top)andprimaryaluminiumsmelting(bottom)52

Tables

Table1

SolarPVandwindPPAsplannedforaluminiumsmelting(non-exhaustive)

28

Table2

SystemicinnovationforflexiblesmeltingoperationandintegrationofVREintothegrid

39

Table3

Decarbonisationoptionsforaluminarefiningprocess

41

Table4

Materialefficiencyprinciplesindifferentendusesofaluminium

43

Table5

Energyandemissionsintensityofdifferentaluminiumproductionroutes

45

Table6

Estimatedpost-consumerscrapcollectionratesin2020

46

Table7

Summaryofactionstoacceleratethetransitioninthealuminiumsector

59

Abbreviations

Al

aluminium

kWh

kilowatthour

BAU

businessasusual

LCOE

levelisedcostofelectricity

COP28

28thmeetingoftheConferenceoftheParties

MBtu

millionBritishthermalunits

MPP

MissionPossiblePartnership

CO2

carbondioxide

Mt

milliontonnes

CO2eq

carbondioxideequivalent

MVR

mechanicalvapourrecompression

CST

concentratedsolarthermal

MW

megawatt

DR

demandresponse

MWp

megawattpeak

EJ

exajoule

OCGT

open-cyclegasturbine

FMC

FirstMover’sCoalition

PES

IRENAPlannedEnergyScenario

GHG

greenhousegas

PPA

powerpurchaseagreement

GJ

gigajoule

PV

photovoltaic

GO

guaranteeoforigin

RD&D

research,developmentanddemonstration

Gt

gigatonne

R&D

researchanddevelopment

GW

gigawatt

SO2

sulphurdioxide

GWh

gigawatthour

t

tonne

IAI

InternationalAluminiumInstitute

TWh

terawatthour

IEA

InternationalEnergyAgency

VRE

variablerenewableenergy

IRENA

InternationalRenewableEnergyAgency

Executivesummary

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Aluminiumisahighlyversatilemetalduetoitslightweightnature,highstrength,recyclabilityandgoodconductivity,anditiscrucialinseveralindustries,includingpackaging,transport,electronics,constructionandrenewableenergy.Theuseofaluminiumhassignificantlyexpandedinthepastfewdecadesduetothedevelopmentofnewmarketsandapplicationsandeconomicgrowth,particularlyinemergingeconomies.Whilealuminiumprovidesmajorvaluetomodernsocieties,itisalsoasignificantcontributortoclimatechange.Aluminiumproductionaccountedforabout1.1gigatonnes(Gt)ofcarbondioxide(CO2)emissionsin2022,mainlyduetoaluminiumproduction’srelianceonfossilfuelsforenergysupply.

Aluminiumproductionisprojectedtoincreasebymorethanathirdby2050.Withoutmeasurestodecarbonisethesector,emissionsfromthealuminiumindustrywillcontinuetorise.Thisreportprovidesinsightsforindustryandpolicymakersontheroleofrenewableenergyandotherleverstoreduceemissionsfromthealuminiumsector.

Aluminiumsmelting–extractingaluminiummetalfromitsrefinedore-accountsforaboutthree-quartersofthetotalCO2emissionsfromproduction(pertonne,globalaverage).Smeltingreliesprimarilyonelectricityasenergyinput.Hence,emissionsfromsmeltingvaryconsiderablydependingontheelectricitymix;smeltersusingrenewableenergysourceslikehydropowerhaveloweremissionsthanthosedependentonfossilfuels.Thus,integratingincreasingamountsofrenewableenergysourcessuchaswindandsolarinsteadoffossilfuelsisakeysolutiontoreducethesector’scarbonfootprint.

Inthelastdecademodernrenewableenergytechnologies,suchassolarphotovoltaic(PV)andwind,havebecomethecheapestsourcesofnewpowergenerationinmostmarketsaroundtheworld.Furthermore,solarPVandwindhavepotentialforfurthercostreductionsthrougheconomiesofscaleandtechnologicaladvancements.Therefore,theyaresettobecomethebackboneofglobaldecarbonisedpowersupplyandwillplayakeyroleinthedecarbonisationofthealuminiumsector.Overtime,locationswiththehighestqualityandavailabilityofrenewableresourcescouldprovidethemostcompetitivelocationsforaluminiumproduction.

ByintegratingsolarPVandwindinsmelting,aluminiumproducerscanleadtheindustry’stransitioninlinewiththeParisAgreement.SeveralsmeltersalreadyplantointegratesolarPVandwindpowercapacitythroughlong-termpowerpurchaseagreements(PPAs).However,mostsmelterscontinuetofinditchallengingtosecureattractiverenewableenergyPPAsduetoacombinationoffactors.Theseincluderegulatoryandmarketbarrierspreventingrapiddeploymentofrenewables,aswellashighdemandforlow-carbonelectricity,whichcandriveuppricesbeyondthelevelaluminiumproducerscanpay,giventheindustry’stightmargins.Also,thevariabilityofsolarandwindisachallengeforsmelters,whichtraditionallyrequireaconstantpowersupply.

Thereisnosingle“one-size-fits-all”solutiontointegratinghighsharesofmodernrenewableenergyintoaluminiumsmelting.Theoptionsavailabletoasmelterdependontheavailabilityofrenewableenergysourcesinthesmelter’slocation,theavailabilityofpowersystemflexibilitysolutionsintheregion,andthedegreeofoperationalflexibilityofthesmelteritself.

TheothertwomajorsourcesofCO2emissionsarefromrefiningaluminaandcarbonanodes.ThesesourcescontributealmostafifthofthetotalCO2emissionsfromprimaryproductionand,inregionswherelow-carbonelectricityisalreadyutilisedforsmelting,areasignificantpartofemissions.Adeepdecarbonisationofthealuminiumsectorwouldinvolvewidescaleadoptionoflow-carbonrefiningprocessesandinertanodes.However,thecostsforlow-carbonrefiningprocesses,inmanycases,arestillhigh,andinertanodesarenotyetcommerciallyavailable.

FigureS1Keyareasofactiontodecarbonisethealuminiumsector

Leveltheplayingfieldforlow-carbonaluminium

Increaseshareofrenewablesinthepowersupplytothealuminiumsector

Increaseuptakeoflow-emissionsrefiningprocess

Commercialiseinertanodes

Improvematerialandenergyuseinproductionandmanufacturing

Despitethechallenges,thealuminiumsectoristakingstepstowardsreducingitsemissions.SeveralproducersalreadyaimtointegraterenewablesintosmeltingandhavebeeninvolvedinRD&Dinitiativestoreduceemissionsfromotherareasofaluminiumproduction.Therehasalsobeenprogressincatalysingdemandforlow-carbonaluminium.Differentactorsareinvolvedininitiativestotrackemissions,encouragetheflowoffinancetowardslow-carbonaluminium,andcollaboratewithotherplayersonindustrydecarbonisationinitiatives.

However,decarbonisingthealuminiumindustryinlinewiththegoalsoftheParisAgreementwillrequiremoreproactiveandcollaborativeeffortsinvolvinggovernments,producers,consumers,academiaandnon-stateactors.

Onanoverarchinglevel,asupportivepolicyenvironmentisessentialtoacceleratethealuminiumsector’sdecarbonisation.Thealuminiumindustry,projectdevelopersandinvestorswillrequireclear,stableandcrediblesignalsofdecarbonisationgoalsandadequateeconomicincentivestofacilitateinvestmentdecisionsonlow-carbontechnologies.Zoomingin,thisrequiresafocusonspecificstrategicareastodrivechangeeffectively.

Acriticalfirststepistocreatealevel-playingforlow-carbonaluminiumbyinternalisingthefullcostofthenegativeenvironmentalexternalitiesoffossilenergyand/orcreatingamarketforlow-carbonaluminium.Thelatterincludesgrowingdemandthroughpublicprocurementandprivate-sectorinitiativessuchasvoluntaryschemesandpartnershipswithproducers.Creatingandimplementingrobuststandards,certificationandlabellingschemescouldfurtherenablethemarket.

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Atthecoreofthesector’stransformationisincreasingtheshareofrenewableenergysupplytothealuminiumsector,particularlyforsmelting.Thisincludesrapiddevelopmentofthesupplyofrenewablestotriplerenewableenergycapacityby2030,inlinewiththegoalexpressedintheOutcomeoftheFirstGlobalStocktakeatCOP28,knownasthe‘UAEConsensus’.Governmentscanfacilitatethisgrowthbyreducingbarrierstodevelopingandintegratingrenewableenergyintopowersystems.Aluminiumproducerscanalsoexploreintegratingrenewablepowersupplyintotheiroperationsthroughdifferentmechanisms.

Whilesmeltingisthelargestsourceofemissions,itisimportanttopayattentiontotheothersourcestoachievedeepdecarbonisation.Forthis,promotinglow-emissionrefiningofbauxiteisimportant.Tothisend,governmentscouldprovideeconomicincentivesforadoptinglow-carbonrefiningtechnologiesordirectfundingorsupportforresearch.AluminiumproducerscouldalsoincreaseeffortsinRD&Dforlow-emissionrefiningtechnologiesincollaborationwithotheractors.Anotherimportantleverfordeepdecarbonisationisthecommercialisationofinertanodes,whichrequiresindustryandresearchinstitutionstoworktogethertoaddressremainingoperationalgapsandefficientlyrolloutthetechnology.

Somepotentialalsoremainstoimprovematerialandenergyuseintheindustry.Thiswillinvolveallstakeholdersinimplementingdifferentinitiatives,suchasinvestinginR&D,adoptingadvancedtechnologies,enforcingstandards,andpromotingbestpracticesforscrapcollectionandinnovativealloydevelopment.

Introduction

13

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Aluminiumoffersexceptionalversatility.Itsupportswide-rangingapplications,inpackaging,cars,andelectriccablesandequipment,amongothercrucialapplicationsvitaltohumanprogress.Aluminium’sversatilityisduetoitshighstrength,lightweight,recyclability,andexcellentelectricalandthermalconductivity.Aluminiumcanalsobealloyedwithdifferentelementstoachievedesiredpropertiesforspecificapplications.Thesepropertiesmakeitasuitablematerialforconstruction,transportandelectronicsapplications.Duetoitsnon-toxicity,itisalsoextensivelyusedinfoodpackagingandasanadditivetohealthandhygieneproducts.Moreover,aluminiumplaysacrucialroleinfacilitatingtheenergytransitionduetoitsuseinsolarpanels,windturbines,electricvehiclesandtransmissioncables.

ThealuminiummarketwasworthapproximatelyUSD160billionin2022(GMI,n.d.).Theindustryisvitaltocommunitiesglobally,providingover7milliondirectandindirectjobsin2019(IAI,2021a).However,theproductionofaluminiumcreatessignificantgreenhousegas(GHG)emissions,emittingover1.1billiontonnesofCO2eq(tCO2eq)in2022(IAI,2023a).ItisthereforeessentialtofindwaystoeliminatethedetrimentalGHGemissionsfromaluminiumproductionwithoutimpedingtheessentialservicesthemetalprovides.Thisreportexaminestheroleofrenewableenergyinthedecarbonisationofaluminiumproduction.Italsoexploresotherleverstoreduceemissionsfromthesector,suchasmaterialefficiencyandrecycling.

Thisreportisintendedtoinformtheindustryandpolicymakersaboutwaysinwhichthealuminiumindustrycanminimiseitsemissionsthroughtheintegrationofincreasedrenewableenergysourcesandotherdecarbonisationlevers.Thereportisorganisedintothreechapters.Chapter1providesanoverviewofthestatusofthealuminiumindustry,includingitsenvironmentalimpact,andthecoststructureforproducingaluminaandaluminium.InChapter2,thereportexploreskeyleversfordecarbonisingthealuminiumindustry,inparticulartheroleofrenewableenergyinaluminiumsmelting.Chapter3evaluatestheprogressmadebyvariousstakeholdersindecarbonisingthesectorandpresentsrecommendationsforfurtherdecarbonisationefforts.

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Aluminiumproductionprocesses

Aluminiumproductioninvolvesmultiplesteps,includingtheprocessingofbauxiteandalumina,theproductionofanodesandsmelting,thecastingandfabricationprocess,andcollectionandrecyclingafteruse(Figure1).

Figure1Aluminiumvaluechain

Bauxiteore,

therawmaterialforaluminium,ismined.

Achemicalprocessturnsbauxiteintoaluminiapowder.

Aluminaissmeltedintoaluminiumbyelectrolysis.

Casthouse

Recyclingreturnsittotheproductionprocess.

Eachoftheseproductshasitsownusablelifetime.

Theresultingmaterials

aremanufacturedintoproducts.

Metalisalloyed

andprocessedbycasting,rollingorextrusion.

Basedon:(ALCircle,2017).

Theprimaryrawmaterialforaluminiumisbauxiteore.Minedbauxiteiscrushedandwashedbeforebeingshippedtoaluminarefineries.Thebauxiteisthengroundandblendedintoaliquorcontainingsodiumcarbonateandsodiumhydroxide.Themixtureisthenheatedtoabout110-270°Cinadigestertanktoobtainhydratedaluminacrystalsafterprecipitation.Thesecrystalsarethenheatedinacalcinertodriveoffcombinedwater,leavingalumina.ThealuminathengoesthroughtheHall-Héroultprocess1forthesmeltingofprimaryaluminium.Theprocessinvolvespassinganelectriccurrentthroughamoltenmixtureofcryolite,2aluminaandaluminiumfluoridetoobtainpure,liquidaluminiummetal.Asaruleofthumb,roughlyfivetonnesofbauxiteisrefinedfortwotonnesofalumina,andagain,twotonnesofaluminaissmeltedforonetonneofaluminium(MPPetal.,2023).

Smeltersrequireanodes,whichareessentiallylargecarbonblocksthatconductelectricityduringthealuminiumreductionprocessinthesmelter.TheseblocksdecomposeandreleaseCO2duringtheproductionprocessandmustbereplacedatperiodicintervals.

Moltenaluminiumfromsmeltingpotsiscastintodifferentshapessuchasingotsandbillets,inacasthouse.

TheHall-Héroultprocessisamethodforextractingaluminiumfromalumina(aluminiumoxide)byelectrolysis.Itistheprimaryprocessemployedinindustrialaluminiumproductionandittypicallyoperatesat950-980°C.

Cryoliteisamineralmainlyusedasasolventtolowerthemeltingpointofaluminaintheelectrolyticproductionofaluminium.

Moltenaluminiumcanalsobetransferredtoanotherfurnace,wheredifferentalloyingelementscanbeaddedtothemelt.Theseprocessesleadtotheproductionofsemi-finishedaluminiumproducts,whicharesubsequentlyturnedintofinishedgoods.

Forsecondaryproduction,aluminiumfromproductsattheendoftheirlifeorfromscrapproducedduringmanufacturingprocessescaneitherberemeltedorrefinedandthensentbacktothecastingprocess.Theremeltingprocessuseshigh-purityscrap,whilerefininguseslower-qualityscrapwithvaryinglevelsofimpurities.

Thealuminiumsectortoday

Primaryaluminiumproductionhasbeensteadilygrowing,fromjustover15milliontonnes(Mt)peryearin1980tocloseto70Mt/yearin2023(Figure2).TheincreaseinproductionisdrivengreatlybystrongdemandinAsia,particularlyChina.Asia’sproductioncapacitygrewfromjust1.5Mt/yearin1980toover45Mt/yearin2022duetorapidindustrialisationintheeconomiesoftheregion.

Theroleofscraprecyclinghasalsoincreasedsignificantlysincethestartofthecentury,morethandoublingfrom17Mtin2005toover43Mtin2023(IAI,2021b).

Figure2Historicalgrowthinprimaryaluminiumproduction

80

Primaryaluminiumproduction[Mt]

70

60

50

40

30

20

10

-

1980 1985 1990 1995 2000 2005 2010 2015 2020 2023

Source:(IAI,2023a).

BauxiteisminedpredominantlyinAustralia,China,GuineaandIndonesia.Thesecountriesproducedaroundthree-fifthsofbauxitegloballyin2021.Chinaalsodominatestheproductionofbothaluminaandaluminium,accountingforapproximatelythree-fifthsofaluminaandaluminiumoutput(Figure3).

Figure3Regionalmixofbauxite,aluminaandaluminiumproduction

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Bauxiteproduction Aluminaproduction Aluminiumproduction

Africa&Asia(excl.China)China

NorthAmericaSouthAmericaEurope

Oceania

MiddleEastOthers

Sources:(IAI,2023a;USGS,2023).

Note:EuropeincludesestimatesfromtheRussianFederation.

Downstreamprocessingandmanufacturingofaluminiumproductsislocatedclosertomarkets.AluminiumuseisalsoconcentratedinAsia,whichaccountedforjustover70%ofthealuminiumusedin2021(Figure4).Notably,Chinawasthelargestsingleconsumerofaluminium,withclosetohalfoftheglobaluse.

Figure4Regionalmixofaluminiumconsumption

Domesticaluminiumuse

0% 10%

20%

30% 40% 50% 60% 70% 80% 90% 100%

Africa&Asia(excl.China)China

NorthAmericaSouthAmericaEurope

Oceania

MiddleEastOthers

Source:(IAI,2023b).

Thedemandforaluminiumiscloselytiedtoeconomicactivityasitisessentialinvarioussectors.AsshowninFigure5,justover70%ofthedemandforaluminiumcomesfromtheconstruction(25%),transport(23%),electricalapplications(12%),andmachineryandequipment(10%)sectorscombined.Thedemandforaluminiumisexpectedtogrowbyabout30%inthisdecade,mainlydrivenbytheadoptionofrenewableenergytechnologiesandelectricvehicles(CRU,2022).Sustainablepackagingsolutionswillalsobeakeycontributortothegrowthofaluminiumuse.

Figure5Breakdownofaluminiumdemandbyuse

Aluminiumconsumption

0% 10%

20%

30% 40% 50% 60% 70% 80% 90% 100%

ConstructionTransportElectrical

MachineryandequiptmentFoilstock

Packaging

ConsumerdurablesOther

Source:(CRU,2022).

Aluminiumisagloballytradedcommodity,withitspricesbenchmarkedinternationallyonplatformssuchastheLondonMetalsExchange(LME),ShanghaiFuturesExchange(SHFE)andNewYorkMercantileExchange(NYMEX).Mostaluminiumistradedwithoutanyenvironmentalattributes.However,severalcommodityinsightsplatformslikeFastmarketsandS&Phavelaunchedlow-carbonaluminiumindices,whichtrackthepremiumforlow-carbonaluminiumproductsinEurope(Peters,2024;S&PGlobal,2022).Theseinitiativesaimtobringclarityandtransparencytothemarketforlow-carbonaluminium.Theydefinelow-carbonprimaryaluminiumashavingemissionslowerthan4tCO2eq/tAl(primary)basedonscope1andscope2emissions(Peters,2024;S&PGlobal,2022).

Environmentalrelevanceofthealuminiumsector

In2022thealuminiumsectoremittedaround1.1gigatonnes(Gt)ofCO2eqemissions(IAI,2023a).Thisisequivalenttoroughly16tCO2eq/tAl(primary)producedand0.5tCO2eq/tAl(secondary)produced(MPPetal.,2023).3

AsshowninFigure6,thereareseveralsourcesofemissionsinthealuminiumproductionvaluechain.Smeltingisthelargestsourceofemissionsinaluminiumproduction,accountingforclosetothree-quartersofthesector’semissionsglobally.Whilesomeregionsheavilydependonrenewablesorhydropowerfortheirpowersupply,otherspredominantlyrelyoncoal,leadingtosignificantvariationsintheemissionsintensityofthesmeltingprocessacrossdifferentjurisdictions(IRENA,2020).

Cradle-to-grave.

InadditiontoCO