Aluminium 2050 Roadmap to a low carbon Europe

An aluminium 2050 roadmapto a low-carbon EuropeLighteningthe load

ElectricityPFC1508000Mio Tonne of CO 2Equivalents1004000A strong aluminium sector is a key enabler502000for the achievement of EU sustainability goals0In March 2011 the European Commission released its Communication‘A Roadmap for moving to a competitive low carbon economy in 2050’(COM(2011)0112), providing scenarios and targets on how different keysectors - power generation, industry, transport, buildings and construction,as well as agriculture - can make the transition to a low-carbon economyover the coming decades. This leaflet provides a synopsis of the aluminiumindustry’s response to the challenges in that communication.100806040Having already reduced its CO 2 equivalent20emissions by a massive 50%, since 1990*,0the aluminium industry has a strong track-20record and is committed to further continuous-40improvement to help bring about a low-carbon-60economy in the EU. The extent to which-80that commitment can be realised depends-100on a number of factors as described below.2010 2020 2030 2050European Industry Imports Savings6000The efforts of the aluminium industry0to reduceits direct emissions (-70% in absolute terms),combined with the Commission’s scenario onreductions of emissions from European powergeneration (-92%), have the potential to delivera total of 79% reduction in the sector’s directand indirect emissions by 2050.kg CO 2eq/tonneMio tonnes012108642Exports of scrap2008 2020per tonnScTotal European Aluminium CO 2 Equivalent Emissions Reduction60Metal production direct emissionsPerFluorinated Compounds (PFC) emissions50Semi-production Recycling Electricity primary40Mio tonnes30-79%201001990 2008 2020 2030 2050This scenario assumes the EU electrical power sectorwill achieve the CO 2 intensity reductions projected bythe European Commission, and the aluminium sectorwill be able to purchase that electricity at internationallycompetitive prices. If the conditions are favourable tocontinued operations and plant upgrades, the aluminiumindustry will invest in Europe. Retention of the industryoffers the biggest emissions reduction potential ina global perspective, while safeguarding Europe’scompetitiveness, skills and employment.Research into new technologies could eliminate directemissions attributable to carbon anode consumption,currently the only technology available for the smelting/electrolysis process. The primary plants could begin toreplace old technology with new non-emitting technologyas soon as it becomes commercially available. This willprobably occur by 2030.* See EAA Sustainability of the aluminium industry 2010 report: www.alueurope.eu/?page_id=160

How do weget there?A positive policy framework is required to enablethe aluminium industry to contribute its potential for CO 2emissions reductions. In particular, the primary industryin the EU cannot compete with aluminium produced incountries that do not impose CO 2costs in electricity,equivalent to the EU Emissions Trading System.Owing to our global price referencing platform, the LondonMetal Exchange, we cannot pass through regionally imposedcosts. Our industry will not survive in the EU, unless it is ableto purchase electricity at internationally competitive prices.The aluminium industry urgently requires enactment of the followingEU measures:• The assessment of existing and future proposals on energyand climate change policies and measures to ensure internationalcompetitiveness. Among others:• Full compensation for the indirect effect of the Emissions TradingScheme on electricity prices is urgently needed to ensure short-termsurvival of the industry, as long as the rest of the world has not adoptedequivalent measures;• Full compensation for renewables costs.• An ambitious EU industry policy giving a 25 years visibility to potentialinvestors, including measures to develop an adequate framework.At EU level, for the industry to adopt bilateral long-term baseloadelectricity contracts.• Support for the aluminium industry to help the EU become the bestrecycling society in the world, and the adoption of measures to avoidaluminium scrap exports to less emissions-efficient regions.• Promotion and development of an innovation policy enabling theindustry to retain its technological advantage over the rest of the World.• To encourage the use of lightweighting technologies in transportto maximise emissions reductions.• Implementation of a life-cycle approach in all environmental assessments.These measures are also intended to:• Maximise the use of aluminium in packaging, therefore safeguardingproduct quality and providing optimal protection properties;• Increase the use of aluminium in building, to maximise emissionsreductions through improved energy efficiency.

Challenges forper tonnethe 2050 scenarioMio tonnes86420kg CO 2eq/tonne6000400020000per tonne2008 2020 2030 2050Mio tonnes CO equivalen30 2050This scenario is challenged, however, by theEU’s non-competitive electricity prices, attributableto the electricity market structure and, in particular, to themportsExportsLifeofcyclescrapsavingDomestic usecost of CO 2 in electricity which industry outside the EUdoes not bear. These factors have contributed greatlyto significant carbon leakage, resulting in actual andannounced closures and/or capacity reduction. Thisgraph shows the recent and announced closures andtheir impact on the lost capacity.Mio tonnes CO 2equivalentsMio tonnes203.43.2153.02.8102.62.452.2Evolution of the Primary Aluminium Production Capacity in the EU27Primary production Recycling production Imported emissions-15%-18%008 2020 2030 2050Mio tonnesPFC emissionsUsing From and fuels producing Electricity aluminiumin Europe saves resources 5000Electricity primary100003.4 8000kg CO 2eq/tonne3.260003.0The consumption of aluminium products-15%is growing in Europe (and worldwide), thanks toaluminium’s properties and its endless recyclability.If the current loss of competitiveness and closureof primary smelters is not reversed, Europe willbecome increasingly dependent on importedprimary0aluminium. This may, in the long run,also negatively affect the fabrication per tonne of semifinishedproducts.2.8 40002.620002030 20502.42.22.0-18%2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013GHG Economies in CO2 eq by Producing Primary Aluminium in EuropeMio tonnes Kg CO 2eq/tonne2.004000 203000153,40020020003,200103,000 150 10002,800502,600 1002,400 02,200 502002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013No European No European No primary Current statusproduction recycling in Europe(2008)European Consumption of Aluminium by Market Sectors (forecast)TransportEngineering201094% reduction 2010 vs 1990Building PackagingOther-15%1990 1995 2000 2002 2005 2007 2008 2009 2010-18%2020 2030 2050Kg CO 2eq/tonne5000Mio tonnes CO 2equivalents4000300020002015105Primary production Recycling production Imported emissions94% reduction 2010 vs 19902,000Without European aluminium primary production and022recycling,2002 2003and2004based2005on2006the 2007average2008 2009worldwide2010 2011 2012energy2013mix, Europe would be responsible for 178% more20emissions, as the imported metal would have a largerCO182 footprint than the displaced EU production. Recentdevelopment of European and global emissions dataindicates 16 that this number will increase further.MWh/t141000001990 1995 2000 2002 2005 2007 2008 2009 2010 1950 1960 1970 1980 1990 2000 2010The sector’s total emissions are more than compensatedfor by the emissions reductions obtained throughthe use of aluminium in transport, as reductionsfrom vehicle emissions attributable to aluminium20 Transport Building Packaginglightweighting save 70 million tonnes of CO 2 perannum. When Engineering considering Other the whole product life-cycle,additional 15 emissions reductions are also achievablein applications such as packaging (i.e. longer shelf life)or energy efficient buildings (both new and renovated).Mio tonnes105No EuropeanproductionNo EuropeanrecyclingNo primaryin EuropeCurrent status(2008)Mio tonnes of CO 2equivalents100806040200-20-40-60-80-1001210GHG Balance - Production and Imports vs. GHG Savings2010 2020 2030 2050European production of aluminium Imports Life cycle saving02010 2020 2030 2050Note: The savings of specific CO 2/kg aluminium, attributable to aluminium in automotiveand transport applications is projected to decline after 2030, owing to increased efficiencyof engines and power trains.

10000-15%8000Continued growth in6000recycling will play a key role10000From fuels -18% Electricity10000kg CO 2eq/tonne4000 ElectricityElectricityPFCAnodesPFCOtherAnodesOther10000kg CO 2eq/tonne-15% 80006000Recycling is critical to sustainable development.It allows resources to be saved and waste to be 6000 reduced.Used aluminium is valuable; it is easily and endlessly-18%recyclable without loss of quality. Both recycled 4000 andprimary metal will be needed to meet projected increasedconsumption of aluminium in Europe. Just as for 2000 primaryaluminium smelting, the conditions must be right to0facilitate the growth of recycling in Europe. This is 0 allper tonnethe more important given that recycling aluminiumsaves up to 95% of the energy required forprimary production.2007 2008 2009 2010 2011 2012 201340002000010 2011 2012 2013kg CO 2eq/tonne8000200001210per tonneProjection of European Scrap Availability & Exports Until 2050per tonneExports of scrap Domestic usekg CO 2eq/tonne80006000400020000Mio tonnes CO 2equivalentsIn this context, it is essential to reverse the dramaticincrease in the export of aluminium scrap fromEurope. The importers in other regions are 12“capturing” a key European resource. Exported10aluminium scrap should be considered as exportedEuropean electricity, without compensation for the8embodied CO 2 .2015100 5 2030 20500No European No European No primary Current 0status3.4production recycling(2008)Building on already impressive powerin Europe3.220503.0and emissions intensity reductionsaluminium Imports Life cycle savingortsMio tonnesirect emissions86Exports 4 of scrap Domestic use202008 2020 2030 2050As primary aluminium smelting is highly power-intensive, power constitutes up 2.4to 40 per cent3.220or more of Transport smelter operating Building costs. Packaging Therefore, the industry is driven to minimize2.2power consumption,as illustrated below. As further efficiencies are limited by existing 3.0technology, medium-term emissionsEngineering Other2.0reductions from power use will be dependent, primarily, on obtaining cleaner power at internationally152.8competitive prices. As the industry has also reduced direct emissions as far as is possible2.6with existing technology, further direct emissions reductions are dependent on thePFC emissions10 anticipated technology breakthrough. Further cost burdens 2.4 imposed by policy on the sectorElectricity primarywould hasten neither further direct emissions reduction nor power use reductions and would only2.2result in increased carbon leakage.Life cycle savingRecycling5Primary production Recycling production Imported emissionsMio tonnes642Mio tonnes2008 2020 2030 2050Mio tonnes3.42.0Mio tonnes2.82.6-15%--15%2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012-18%2002 2003 2004 5000 2005 2006 2007 2008 2009 2010 2011 2012 2013Mio tonnes CO 2equivalentsMio tonnes2110PFC emissions20102020 2030 2050400094% reduction 2010 vs 1990Electricity primaryReduced Electricity Consumption at the Electrolysis Stage –Best Available Technique Improvements, Europe*222020 2030 20502050004000Kg CO 2eq/tonne3000PFC Emissions from Primary Aluminium Production Europe200094% reduction 2010 vs 19901000MWh/t18162030 14 2050Kg CO 2eq/tonne3000200001990 1995 2000 2002 2005 2007 2008 2009MWh/t121000101950 1960 1970 1980 1990 2000 201001990 1995 2000 2002 2005 2007 2008 2009 2010*Total electricity consumption includes a number of additional consumptions

The benefits of apermanent materialThe demand for aluminium products is steadily increasing year by year. Why?On top of worldwide demographic growth and higher purchasing power in emergingcountries, aluminium product consumption is also growing in Europe becausealuminium is replacing other materials thanks to its unique combination of properties,such as lightweight, strength, corrosion-resistance, durability, ductility, formability,conductivity and endless recyclability. We cannot fly, travel by high speed train,high performance car or fast ferry without it. We cannot get heat and light into ourhomes and offices without it. Our society depends on it to preserve food, medicineand provide electronic components for our computers.Aluminium is part of our daily lives because it offers intelligent solutionsto our needs!Aluminium industry key facts and figuresEurope (excluding Russia) 2010Imports into EuropeDirect jobs.........................................................................................................255.000% of totalMt Mt consumptionMining ..............................................................................................................................3.2 11.9 79%Refining (alumina)....................................................................................................6.5 4.5 41%Primary production................................................................................................4.4Recycling.......................................................................................................................4.3Production of semisRolled products.......................................................................................4.5Extrusions....................................................................................................3.1Castings........................................................................................................3.4Wire, slugs, powder.............................................................................1.23.8 30%About the EAAThe European Aluminium Association (EAA) was founded in 1981 and representsthe aluminium industry in Europe. It encompasses primary aluminium producers,downstream manufacturers, producers of recycled aluminium and national aluminiumassociations representing the manufacturers of rolled and extruded products in18 European countries. Other associations, the Organisation of European AluminiumRecyclers (OEA) and the European Aluminium Foil Association (EAFA), are alsomembers of the EAA.Contact usAv. de Broqueville 12B-1150 BrusselsTel: +32 (0)2 775 63 63Fax: +32 (0)2 779 05 31eaa@aluminium.orgwww.alueurope.euFebruary 2012. Source of data: EAA, IAI, OEA.