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Fossil Free & Environment

The aluminum sector produces about 2% of the world’s annual greenhouse gas emissions. As the largest consumer of aluminum globally, the auto industry has a responsibility to use its outsized leverage over the industry to clean up its emissions. 

There are several crucial levers for decarbonizing aluminium manufacturing that can be supported by automakers: 

  • Switching to zero-emissions electricity as a top priority, given indirect emissions from power generation account for 70% of aluminium production’s total (direct and indirect) emissions. Fortunately, as the IEA explains, because “about 55% of the power consumed by the industry globally is self-generated rather than purchased from the grid, many of these emissions are within the control of the industry itself.” 
  • Deploying near zero-emission technologies for refining and smelting that advance the industry towards zero-carbon aluminium production. This is another critical lever since aluminium refining and smelting make up 90% of the industry’s direct emissions. Fuel switching to alternatives such as electric and hydrogen boilers, and substituting carbon anodes for inert anodes are some of the options being developed to achieve this that have the potential to abate 100% of direct emissions. 
  • Strategies for material efficiency and increasing the proportion of recycled aluminium production. On average, producing a tonne of secondary aluminium generates only about 3% of the emissions associated with a tonne of primary aluminium. 

As is the case with steel, “more aluminium will be required than was produced in the past, so scrap availability will remain insufficient to meet demand purely with recycled production, even if collection rates are maximised” (IEA). Demand-side interventions that can support and scale the deployment of the breakthrough technologies needed to decarbonise primary aluminium production will therefore be essential, and automakers have a critical role to play in this regard. 

Action needs to be taken now to support these breakthrough technologies to reach the market at scale. This is because, the IEA explains, “for heavy industry, the year 2050 is just one investment cycle away… The challenge is to ensure that innovative near-zero emissions industrial technologies that are at large prototype and demonstration stage today reach markets within the next decade, when around 30% of existing assets will have reached 25 years of age and thus face an investment decision. If these innovative technologies are not ready, or not used even if ready, this would have a major negative impact on the pace of emissions reductions or risk an increase in stranded assets… The critical window of opportunity from now to 2030 should not be missed.”

What can automakers do?

Automakers can spur investment in and the deployment of the breakthrough technologies that are required to decarbonize aluminium by:

  • Undertaking equity investments, joint ventures, offtake agreements and other contractual agreements with suppliers to catalyze investment in and production of low and, eventually, zero-carbon aluminium. 
  • Setting publicly disclosed targets to increase the quantity of low/zero-carbon aluminium used in their production cycles  and disclose progress towards these targets. 
  • Joining and disclosing purchasing commitments with demand-side multi stakeholder initiatives such as The First Movers Coalition and the Aluminum Stewardship Initiative. By aggregating the commitments of multiple steel consumers, such multi-stakeholder initiatives can unlock investment in low/zero carbon aluminum by creating confidence in the scale of future markets. It should be noted, however, that multi-stakeholder initiatives can come with limitations. For example, the Aluminum Stewardship Initiative’s certification process has been criticized by Human Rights Watch with regards to its robustness. Nonetheless, automakers can use their influence in these spaces to raise such concerns and drive up standards within them.
  • Using their voices publicly to send demand signals to the market with regards to the auto industry’s commitment to purchase these materials. 

Automakers should also support the increase in secondary aluminium production by setting targets to increase the amount of secondary / scrap aluminium in their production cycles, disclosing their progress towards achieving these targets, and developing closed loop processes to improve the recyclability of aluminium in their production cycles. 

Finally, automakers should implement stringent environmental and human rights due diligence requirements for their aluminium suppliers to ensure that, from mining to manufacturing, the aluminium used in their vehicles does not cause other negative environmental and human rights impacts.