Although originally borrowed from a book of the same name, some call Australia the “Lucky Country.” Blessed with resource abundance, a warm climate and decades of near uninterrupted growth, it certainly seems to have it all.
But it isn’t alone.
For decades, industrialized countries have looked at the Middle East’s oil wealth with some degree of envy. Those countries have also looked on with a little irritation, particularly when OPEC artificially engineers oil price rises to reap huge financial rewards for member states.
The United Arab Emirates seems to have the best of both vast oil wealth and the nous (to use the British slang) to invest the proceeds, not just in palaces and Rolls Royce cars but in infrastructure, education and diversified industrial development.
As the world potentially approaches peak oil — how many times have we heard that over the decades? — the UAE is already beginning to exploit its other near endless resource: sunlight.
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The output from its 1 GW Mohammed bin Rashid Al Maktoum Solar Park — or, at least, 560,000 megawatt-hours of its output — will feed the Emirates Global Aluminium (EGA) smelter.
That’s enough power, The Driven reports, to produce some 40,000 tons of carbon-free aluminum.
Originally based on low-cost, natural-gas-powered electricity, the UAE can now neatly transition its aluminum smelters into the future of renewable power.
‘Carbon-free’ aluminum in the automotive sector
Better still, EGA can get a premium price for its “carbon-free” aluminum. Buyers like BMW are keen to source low-carbon raw materials to lower the environmental impact of their cars. As such, buyers can both meet regulatory targets and enhance their brand image.
While far from alone, BMW have been at the forefront of lowering the lifecycle environmental impact of their products for years.
The automaker has increased the number of parts that can be recycled. It has also reduced the carbon content of the materials that go into its vehicles.
The Driven reports the German automaker has signed a deal sourcing 43,000 tons of this solar aluminium. That’s enough to supply nearly half the annual requirements of the company’s light metal foundry at Plant Landshut.
This is just part of BMW’s larger plan to reduce the company’s CO2 emissions across its supplier network by 20% by 2030. The new solar-powered aluminum will help BMW avoid 2.5 million tons of CO2 emissions over the next 10 years.
Rusal making the transition to low-carbon aluminum
Of course, EGA is not alone in developing ultra-low-carbon aluminum.
Russia’s Rusal has also been pushing the concept for some years. The Russian firm has migrated all its old coal-fired power sources to hydro power to achieve one of the lowest carbon footprints in the industry.
Such low-carbon aluminum products — from hydro or solar — are not carbon-free. They still contain a carbon load from other parts of the production process, like carbon anode consumption. However, their carbon content is vastly lower than aluminum produced using coal (as is the case in much of China).
The state of Chinese aluminum production
China has delivered the world’s highest rollout of renewable energy for many years. This is particularly true for wind and hydro.
The country, however, still faces a monumental challenge in migrating its aluminum industry from coal-fired power to greener alternatives. The country must do this to meet Beijing’s own environmental targets. In addition, it has to so its aluminum industry does not fall behind in the premium, low-carbon primary aluminum market that will evolve over the first half of this decade.
According to Reuters, China will need to shut around 47 gigawatts of inefficient, subcritical coal power capacity dedicated for aluminum over the next 10 years or so if it wants to achieve Beijing’s target of being carbon-neutral by mid-century.
China’s aluminum industry last year emitted more C02 than some entire countries, including Indonesia and Brazil. Some 65% of the power coming from off-grid captive power plants were built specifically for the adjacent smelter.
There has been a migration of new capacity to China’s southwest province of Yunnan in search of hydropower. However, most of these captive power plants use coal.
At least for state-owned Chinese smelters, there will no doubt be financial incentives to either move or source power more sustainably.
Meanwhile, for the private sector, the commitment will have to be spread over a longer time frame.
The top private-sector producer, China Hongqiao Group, alone has 17GW of coal-fired power production. That accounts for a third of the industry’s total capacity in Shandong province.
On top of Beijing’s decarbonization targets, the industry now has the added incentive of meeting the demand from more environmentally conscious end users. Those end users include the automotive and consumer goods industries.
That is a challenge Beijing will have to address if it’s to avoid its output falling to second best.
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