Aluminium

     Aluminium is both an important input to a number of technologies critical to the energy transition, and a significant source of CO₂, responsible for about 3% of the world’s 9.4 Gt of direct industrial CO₂ emissions in 2021. In the past few years, the average emissions intensity of aluminium production has seen only a slight downward trend. However, in the Net Zero Emissions by 2050 Scenario it declines by about 3% per year to 2030. In order to get on track, the aluminium sector needs to develop and deploy new technologies to reduce emissions from primary and recycled production, while the industry and its customers need to increase scrap collection, sorting and recycling. 

Although total energy used in the aluminium sector has increased with production, the energy intensity of aluminium production since 2000 has declined significantly. China has largely driven this trend as it is responsible for around half of global production. It has been steadily deploying the best available aluminium production technology, going from one of the most energy-intensive aluminium producers to one of the least. With China’s potential for energy intensity improvements essentially fully exploited, global energy efficiency in primary production has been modest in recent years.  

Alumina refining and recycled production are both processes that currently rely on fossil fuels. Fuel switching to alternatives, such as bioenergy and hydrogen for high-temperature processes, or near zero-emission electricity for lower-temperature heat processes, will be important to get on track with the Net Zero Scenario.  

Global aluminium production grew at a sluggish pace in 2019 and 2020, in contrast to average annual growth of 6% in 2010-2018. 2021 saw production growth at a rate close to 4%, considerably higher than the previous two years when it was nearly flat. Global demand is likely to continue growing in response to increasing global population and GDP, and the increased use of aluminium as an input for several technologies important to the transition to a net zero economy. 

Presently, nearly all aluminium primary smelting uses carbon anodes that release CO₂ as a part of the electrolysis process. These anodes can be replaced by inert anodes that release oxygen as they decay. Commercialisation and early deployment of this technology is critical in the next few years to get on track with the Net Zero Scenario, which sees inert anodes used for just under 10% of primary production by 2030.  

Emissions can be further reduced by increasing the proportion of recycled production, as this is much less energy-intensive than primary production. The share of secondary production has remained fairly constant at 31-33% (excluding internal scrap production) for most of the past two decades, but has recently seen modest increases – in 2021 the share was 34% (20% was from end-of-life scrap). Underlying this global trend is an increasing share of secondary production in many regions of the world, offset by China. There, primary production has surged and secondary production has lagged as the result of rapid growth, a high export rate leaving less material to be recycled, and slower development of the recycling industry. 

Global collection rates for aluminium are currently over 95% for manufacturing scrap and just over 70% for end-of-life scrap. While these collection rates are quite high, there is potential to improve end-of-life scrap collection. This can be facilitated by improving recycling channels and sorting methods, by better connecting participants along supply chains to help ensure that end-of-life scrap is channelled back to aluminium producers, and through extended producer responsibility schemes to involve product manufacturers in post-sale life cycle management. Maximising the collection of end-of-life scrap is particularly important in the Net Zero Scenario, as material efficiency strategies reduce the generation of manufacturing scrap. Nevertheless, primary production will still remain important into the future, as 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.  

In the Net Zero Scenario, secondary production expands to account for about 40% of production by 2030.

Many countries have introduced policies addressing industrial emissions as a whole – these are discussed at further length on the IEA's tracking page for industry. Relevant policies specifically for aluminium include the following:  

• China – responsible for producing around half of the world’s aluminium in 2021 – has announced that it will be putting a price on aluminium emissions, possibly as soon as 2023. It further announced that, as a part of its Pollution Reduction and Carbon Reduction Synergies Implementation Plan, the output of recycled aluminium will reach 11.5 Mt by 2025, and the proportion of renewable energy used in electrolytic aluminium will increase to more than 30% in 2030.  

• The European Union is in the process of developing a carbon border adjustment mechanism that will include aluminium, while the United States has stated that it is considering such a mechanism. These policies would apply tariffs to imported emissions-intensive goods from jurisdictions with weak or no emissions policy in an effort to limit carbon leakage (loss of competitiveness from emissions policy due to cheaper, emissions-intensive imports) and incentivise stronger emissions measures in other countries. 

• France has announced its industrial decarbonisation roadmap to 2030, which includes a plan to invest EUR 5.6 billion on decarbonisation initiatives for domestic industries, as well as a decarbonisation roadmap for mining and metallurgy containing specific provisions for aluminium.  

SOURCE FROM IEA(international energy agency)