Resource

Climate and the Aluminum Industry

December 31, 1969

The Big Picture

The U.S. aluminum industry is the largest producer of primary aluminum in the world, annually producing nearly $40 billion in products or about 6 billion pounds of metal. There are over 400 aluminum plants in the U.S. with automotive and light-truck manufacturing accounting for the largest market or about one-fifth of industry shipments. Based on Aluminum Association surveys, the U.S. annual rate of primary aluminum production totaled nearly 2.5 million metric tons in 2005, down 1.5% from the year before. The total global aluminum supply is about 11 million metric tons, 33% of which is recycled aluminum.

The upstream production of aluminum involves the mining, transportation, and beneficiation of bauxite, activities with their own climate-related impacts. Primary aluminum is produced by the electrolytic reduction of alumina. There are two types of smelting technology for primary aluminum production: prebake and Soderberg. The prevailing process for secondary aluminum production is smelting in rotary kilns under a salt cover.

Greenhouse gas emissions in the production of primary aluminum come from processes such as coke calcination, anode production and consumption, lime production, and electrical generation. Process carbon dioxide emissions make up about half of total direct carbon dioxide equivalent emissions from aluminum production with the remaining greenhouse gases (GHG) emitted being perfluorinated carbon (PFC) gases. For example, the measurements of the two perfluorocarbons (PFCs) — tetrafluoromethane (CF4) and hexafluoroethane (C2F6) — emitted directly from the manufacture of primary aluminum are used in the calculation of facility specific greenhouse gas emission factors. Commercial aluminum production has been identified as the largest emitter of these two compounds. Although the annual amount of PFC emissions is not great, the impact is magnified because of the high global warming potentials (GWPs) of these two gases over the lifetime of the a facility.

The production of primary aluminum is obviously energy intensive — energy consumption is roughly 14 megawatt hours per ton (MWh/t) of aluminum with prebake technology (Soderberg technology uses 17.5 MWh/t.). The production of primary aluminum represents slightly more than 1% of all U.S. energy use and 3.3% of all U.S. manufacturing energy use. Commercial energy use on this scale translates into significant contributions of the indirect greenhouse gas emissions associated with the production of primary aluminum. Nearly 85% of the aluminum industry’s energy comes from electricity (including losses) with natural gas accounting for most of the remainder. The energy “intensity” (i.e., energy consumed per dollar of products shipped) of primary aluminum production, however, has been reduced significantly over the last 20 years due to improvements made in the design of electrical conductor bus components, computer systems for control and management of cell operations, use of alumina point feeder systems, and chemistry changes. Due to efficiency, innovation, and technology, intensity improvements can, of course, be expected over time in most every industry sector. It should be noted that secondary aluminum production uses less energy than primary production.

Finally, the aluminum industry is a major consumer of electricity, used to power its substantial production processes. Although there are no direct emissions of carbon dioxide associated with the consumption of electricity, coal and gas fired energy sources are standard factors in the reporting protocols for greenhouse gases and represent a significant component of aluminum-industry energy usage. All mature industries, including aluminum producers, can be expected to measure direct and indirect climate-related impacts through the use of recognized, reliable, consistent, and transparent calculation and reporting of greenhouse gases for internal company use and for reporting to the public, as well as to specific audiences such as governments and special interest groups.

Key Players

Companies in the primary aluminum industry. Major aluminum producers are already recognizing the business benefits of greenhouse gas reduction:
Alcan Inc. The environment ranks first among equals in Alcan’s “EHS First” initiative (environment, health, and safety). The EHS program dedicated to lowering GHGs is called Target, which was established in 2000 with senior executives. Target initiatives permeate all levels of the company and GHG coordinators are stationed at all manufacturing plants.

Alcoa Inc. The world’s leading aluminum producer has made a corporate commitment regarding climate change. Alcoa’s Climate Change Strategy Team was developed to set policy direction and provide oversight to help executives implement its policy. For example, the company encourages competition among facility managers by benchmarking emissions reductions in its 20-plus refineries.
Trade associations. Representing individual companies are trade organizations which, among other functions, have the power to negotiate with government agencies on voluntary environmental initiatives. For example, the worldwide aluminum industry has made significant progress in reducing emissions of PFCs over the last decade and continues to work toward achieving further reductions.
U.S. Environmental Protection Agency and other government agencies. The EPA has worked with the primary aluminum industry to develop and maintain a voluntary greenhouse gas emission reduction program. Companies participating in the Voluntary Aluminum Industrial Partnership (VAIP) work with EPA to improve aluminum production efficiency while reducing perfluorocarbon (PFC) emissions, potent greenhouse gases that remain in the atmosphere for thousands of years. The 1990 to 2000 phase of the program resulted in about a 45% reduction in PFC (tetraflouromethane [CF4] and hexaflouroethane [C2F6]) emissions below 1990 levels from the primary aluminum production process. The program was renewed in 2005.
Non-governmental organizations. The global challenge presented by climate change and growing energy demands have gained the attention of civil society organizations around the world and have given rise to the WRI/WBCSD GHG Reporting Protocol and the Global Reporting Initiative. Additionally, socially responsible investors and shareholders are actively seeking corporate commitments to energy and emissions management. Civil society organizations and non-governing organizations are now on par with many governments as among the recognized arbiters of legitimacy in corporate social responsibility management and reporting.

The Upside

Companies can save money by implementing energy efficiencies throughout the lifecycle of aluminum products.
The market for recycled aluminum products is growing and consumers are demanding environmental responsible products. Recycling and reuse activities are valued as the key to sustainability and represent and important environmental service.
Efficiency and content certification schemes allow companies to gain recognition for their activities.

Reality Check

Serious questions remain about the role of major materials suppliers in responding to climate change. Both industries have developed voluntary energy and emissions reduction initiatives in cooperation with the U.S. Department of Energy and the U.S. Environmental Protection Agency. However, most voluntary programs harness the possibility for reducing the intensity of environmental impact per ton of product produced rather than calling for actual reductions.
Companies that engage in emissions reduction and energy efficiency programs must compete in a global marketplace that includes highly polluting inefficient production activities. The environmental impacts of aluminum production worldwide are more widespread than any one company, and cannot be solved without cooperation among companies, governments and NGOs.

Action Plan

Assess your footprint. Determine what the major emissions of greenhouse gases are for your company. These include the supply-chain sources of carbon as well as emissions from direct energy usage and electricity purchases.
Make a measurable and verifiable commitment to energy efficiency. One of the best ways for aluminum companies to reduce their climate change footprint and realize significant cost savings, is to increase the energy efficiency of their processes, including manufacturing and transportation.
Increase transportation efficiency throughout the supply chain. The ocean and ground freight industry is now recognized as a critical link in the supply chain of all industries. Initiatives such as EPA’s SmartWay Tranport Partners are designed to increase energy efficiency while significantly reducing greenhouse gases and air pollution. Corporate commitments to climate management now include tracking and establishing a more efficient transportation future by adopting fuel-saving strategies that increase profits and reduce emissions.
Demonstrate your commitment through a voluntary emissions-reduction program. The aluminum industry has developed voluntary energy and emissions reduction initiatives in cooperation with the U.S. Department of Energy and the U.S. Environmental Protection Agency. Most voluntary programs harness the possibility for reducing the intensity of environmental impact per ton of product produced rather than calling for actual reductions.
Adopt specific policies for responsible procurement to ensure purchasing decisions are aligned with environmentally sustainable principles.
Commit to the use of biofuels and other renewables to power industrial processes. Sustainable supplies of biofuels are thought to be climate neutral, that is, carbon is being recycled with no net additions to the system. As such, it is an attractive source of “green and clean” energy that is receiving serious attention in energy markets, especially those markets with easy access to biomass supplies.
Certify recycling content and management practices with an established organization. One of the most significant roles that the aluminum industry can play in terms of environmental sustainability and corporate climate management is one of continued leadership and innovation with regard to recycling. The recycling of aluminum, for example, requires 95% less energy and produces 95% lower greenhouse gas emissions than the production of primary aluminum.
Begin planning energy and technology options for next generation of production. Greenhouse gas targets and commitments for post-2012 should include energy supply — and demand — related milestones, including targets for green power; green heat and advanced biofuels; carbon dioxide capture, transport and sequestration; and energy efficiency and conservation.

Leads

The Aluminum Association, Inc. is the trade association for producers of primary aluminum, recyclers and semi-fabricated aluminum products, as well as suppliers to the industry.
The International Aluminum Institute has supported a variety of environmental initiatives within the industry, primarily relating to greenhouse gas and perfluorocarbon (PFC) emissions reductions.
The U.S. EPA Climate Leaders program encourages companies to develop long-term, comprehensive strategies for reducing greenhouse gas emissions.
A joint program of the U.S. EPA and the aluminum industry, the Voluntary Aluminum Industrial Partnership aims to develop strategies for increasing aluminum production efficiency while reducing emissions of potent greenhouse gases.
The Aluminum Sector Greenhouse Gas Protocol includes guidance documents for greenhouse gas emissions monitoring and reporting by the aluminum industry.

The Bottom Line

The aluminum industry is well situated to promote aluminum recycling and the energy efficiency of transporting lighter aluminum materials. The industry promotes this message widely and will need to combine its recognition of the environmental benefits of aluminum with similar commitments to energy efficiency and the commercial use of new renewable energy. Leaders in the aluminum industry are, however, beginning to adapt their practices to reduce greenhouse gas emissions and minimize overall climate impact. They have launched voluntary emission reduction programs and participate in emissions trading markets. With the onset of the Kyoto Protocol the industry will be expected to calculate and manage actual reductions in greenhouse gas emissions, as opposed to improvements in emissions intensity levels that occur normally over time. Purchasing and producing renewable energy, investing in low carbon technologies, working to improve energy efficiency, and offering new products and services aimed at reducing emissions are all meaningful strategies for the aluminum industry to undertake.