Low-Carbon Aluminum Market Could See 10% Production Boost in 2023

Industry with low carbon footprint. Industrial warehouses with s

Experts project both demand and supply of low-carbon aluminum will grow substantially in 2023. Indeed, some reports, like this analysis by Reuters, forecast a more than 10% boost in the production of low-carbon metal. The question is, what does this mean for the aluminum market as a whole? Moreover, will the low-carbon switch be as smooth as some predict?

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Aluminum Market Under Pressure to Reduce CO2 Output

Aluminum is the most energy-intensive metal to produce. In fact, estimates say it accounts for nearly 1.1 billion tons of global CO2 emissions yearly. However, more and more industries are investing in so-called “green aluminum.” This switch could reduce global CO2 emissions by around 1.2%, or 13 million tons. This might not sound like much, but aluminum market analysts see it as a big step in the right direction.

There’s also the matter of motivation. Around the world, governments are putting significant pressure on aluminum producers to reduce greenhouse gas emissions. Some are even providing incentives for producers to increase the output of the low-carbon alternative. The latest estimates show that “green” aluminum emits less than 4 tons of CO2 per ton of metal. Standard aluminum, on the other hand, averages around 16.6 tons.

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Automotive Sector Leading the Charge on “Green Aluminum”

In the last couple of years, many aluminum producers have invested heavily in low-carbon technologies. Norsk Hydro, for example, has spent billions making its aluminum more sustainable. Rio Tinto, Alcoa, and Vedanta have also invested significant funds into the green aluminum market.

Movement of vehicles along the production line at the plant. Car Assembly shop. Car Assembly by parts

The automobile sector, one of the largest consumers of aluminum, is at the forefront of this “go green” movement. As many might expect, European car manufacturers are the driving force. Germany’s BMW has already agreed to purchase aluminum made with solar power from Emirates Global Aluminum. Likewise, Audi is currently using metal produced with the new ELYSIS technology. Pioneered by Alcoa and Rio Tinto, ELYSIS claims to remove all CO2 emissions and replace them with oxygen.

Another German carmaker, Mercedes-Benz, recently signed a letter of intent with Norwegian aluminum maker Hydro. The manufacturer plans to establish a low-carbon technology roadmap between 2023 to 2030. Both companies have agreed on the gradual supply of very low CO₂ emission aluminum for automotive applications, putting them on the road toward de-carbonization.

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Several Industries Ready to Embrace “Green Aluminum”

Earlier in the year, Vedanta Aluminum launched two product lines: Restora (low-carbon aluminum) and Restora Ultra (ultra-low-carbon aluminum). According to the company, it was the first major non-ferrous Indian metals producer to manufacture low-carbon products for global customers. By leading the aluminum market in its green revolution, Vendanta is taking a significant step towards achieving net zero carbon by 2050.

But in this drive towards eco-friendly aluminum, all eyes remain on China. After all, the country is the largest producer of primary aluminum in the world. However, China’s development of green hydrogen technology is still in its early stages.

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Experts say that if China wants to meet its net-zero target by 2060, it must look to the aluminum industry and accelerate its potential to use of de-carbonization technology. Indeed, such a move could cut down emissions from aluminum processing by 65% over the next 40 years. Currently, the aluminum industry contributes about 5% to China’s overall carbon footprint.

Unfortunately, the Chinese aluminum market may have different goals in mind. Indeed, the majority of China’s smelters still depend on coal-fired energy. Experts also say that switching to eco-friendly energy options is not as simple as transitioning to renewables. In the end, creating de-carbonization processes in aluminum manufacturing has to be commercially viable and scalable to make it attractive for Chinese producers.

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