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Growing consumer demand for green aluminium is often highlighted and primary aluminium producers have introduced branded metal and alloys to serve it, but the extruders and rolling mills converting both primary and secondary aluminium into the forms needed for fabrication into finished products are also a vital link in the supply chain. Myra Pinkham reviews US sustainability trends in the sector.

US downstream aluminium producers – including flat-product rolling mills and extruders – are increasingly stepping up their efforts to be more sustainable and green, with much of their efforts being centered upon increasing the recycled content of their products and using more renewable energy sources. Both sustainability and ESG (environmental, social and governance) goals as a whole tend to be seen as being more of a target for primary aluminium, given that, according to Christian Georges, head of metal and mining equity research for Societe Generale, such goals tend to have a more marginal direct impact downstream. He said that because of this, extruders, flat rollers and other downstream producers look to use the primary aluminium they buy in the greenest way, by mixing it with such elements of the circular economy as recycling, running their equipment more efficiently, and sourcing more renewable energy to power their plants.

Clearly the push to reduce carbon emissions through greater sustainability and the concept of a circular economy is a global one. But Europe has been, and continues to be, ahead of the US when it comes to downstream aluminium green initiatives and goals. “Much of that is cultural,” Lynn Brown, the managing principal of Long Point Associates and a market development consultant for the Aluminum Extruders Council (AEC), said, explaining that the US tends to be more of a disposable society where sustainability is not as much in people’s mindset as it is in Europe. Some of Europe’s governmental policies, including its Green Deal, have also given it a push to transition into a more sustainable society and economy, Charlie Straface, president of Norsk Hydro’s Extrusion North America business unit, said, adding that Europe has also been more aggressive in what it calls “taxonomy,” including the use of a carbon tax to incentivize investments in low-carbon processes, products and technologies. Despite this, Charles Johnson, president and chief executive officer of the Aluminum Association, observed that there are some areas where the North American industry is currently at parity with the European industry, noting that the carbon intensity of primary aluminium per tonne is now essentially identical in North America and Europe, and is much lower than it is in the Middle East, Latin America and China. “The sustainability conversation has definitely jumped up on the list of priorities for most US aluminium companies, both upstream and downstream,” said Matt Aboud, senior vice president, strategy and business development for Century Aluminum, who noted that several years ago just a few companies established sustainability goals and/or published sustainability reports. “But today everyone is doing that,” he noted. All that, however, is not to say that this has not been important to US downstream aluminium companies for a while. In fact, Straface said that extruders have been working on becoming greener even before green trends became as high-profile as they are today. Similarly, Pierre Labat, senior vice president and chief strategy and sustainability officer for Novelis, said that it is in the flat-rolled aluminium producer’s DNA to shape a more sustainable future by both recycling more and to decrease the carbon footprint of its products. Inherent sustainability “Sustainability is inherent in what downstream producers do, given that that we work with recycled aluminium day in and day out and recycled aluminium is already one of the most sustainable metals out there,” Ryan Roush, chief operating officer of JW Aluminum said. He added that when they combine that with technological innovation, process improvements and a commitment to transparency, it drives further progress in that direction. Johnson pointed out that, according to the association’s recent lifecycle assessment report, since 1991 not only has the amount of carbon used to produce a pound of primary aluminium in North America dropped 49%, but over the same timeframe the carbon required to produce a pound of recycled aluminium declined by 60%. “And that is just in the production process,” he noted, not considering the savings that were achieved when a company increases the recycled content of some of their products, as many have been recently doing. Roush noted that JW Aluminum approaches its sustainability goals in a similar way as other aspects of its business, through Six Sigma Lean principles, data driven analysis and continuous improvement. “We want to make sure any stake we put in the ground is authentic and achievable. It is a lifelong commitment to secure a safe and sustainable future for generations to come.” Other companies take similar stances. For example, a company spokesperson said that Kaiser’s business model and corporate values have always included elements of being a long-term profitable and sustainable business with consideration for the environment and the communities where it operates. Brown said that the AEC helps its members to achieve their goals through its move to publish extrusion industry environmental product declarations (EPDs), which include an underlying lifecycle assessment. The association’s second EPD, which is based upon 2020 data from members representing a third of North American production, is expected to be released in April. Brown said that that the AEC sees its EPD as being very valuable to extruders, given that if you do not measure an industry’s sustainability then you cannot manage it. “Those participating in this study have an opportunity to benchmark their performance compared with those of other participants, therefore giving them the ability to take appropriate actions to improve their performance,” he explained. Consumer demand The push is coming from a mix of consumer demand and governmental policies, Georges said, explaining that while companies are clearly under pressure from their customers to demonstrate that they are making an effort to also make them more energy friendly, certain governmental incentives – including those related to encouraging the purchase of electric vehicles – are also a contributing factor. “Companies won’t move as quickly in this direction as they could without the push from end-use markets,” Aboud said, given that buyers need to be the ones to demand validation or certification that they are being offered green products and they must be willing to pay more for them, and given that making those products require companies to make certain often costly investments. While that had not been the case across the board previously, Novelis’ Labat said that over the past two years he began to see an explosive push from its customers, who have also publicly announced their commitment to become greener and have been in active discussions about how their aluminium suppliers can help them achieve their goals. Brown observed that while the initial push has come from the architectural, or building and construction market, recently the automotive sector has also become more concerned with their carbon footprint. Aboud said that for more than ten years the US has had certain requirements under its Leadership in Energy and Environmental Design (LEED) program for sustainability, including recycled content. Johnson noted that the US recycling rate in the building and construction market is over 90%, which, he said, is also the case in the auto sector, which has recently begun to accelerate its push to be more sustainable. Using more aluminium is one way to do so, according to Johnson, who highlighted that vehicle lightweighting with aluminium could drive about a 20% drop in lifetime vehicle emissions. He added that the recent transition in the auto industry towards more electric vehicles (EVs) definitely supports that push. This is not just because of the need to lightweight EVs to increase their range, but because they have been designed from the ground up as a new solution to address greenhouse gas (GHG) emissions. Not just aluminium sheet provides the advantage, Straface pointed out, but also extrusions, for example where they are used in the battery box to compensate for the weight of batteries, as well as in the vehicle’s crash management systems. The Aluminum Association is partnering with the Can Manufacturers Institute to increase the North American used-beverage-can recycling rate, which is currently only about 45%, to 70% by 2030 and 90% by 2050, through a combination of recycling infrastructure investment and their push to expand container deposit programs into more US states. “It sounds daunting, but is doable,” Roush said, given that consumers are already recycling aluminium cans at more than double the rate of plastic bottles and that in states that already have deposit programs UBC recycling rates average 80%. Decarbonization goals There are many different things that downstream aluminium companies are doing to meet their, and by extension their customers’, decarbonization goals. Suzanne Lindsay-Walker, Novelis’ vice president of sustainability, identified several such levers – increasing recycling capacity; working with customers to develop high-recycled-content alloys and to enter into more closed-loop recycling contracts; innovations to lower the carbon intensity and increase the energy efficiency of in-house production processes and reducing Scope 1 and 2 emissions; and the sourcing of low-carbon primary aluminium, reducing Scope 3 emissions, which account for most of downstream producers’ carbon footprint. John Mothersole, director of research for IHS Markit’s pricing and purchasing service, pointed out that in North America the secondary side of the aluminium industry is three to four times the size of the primary side, which is why the industry’s push to increase recycling rates even further makes so much sense. It is important for the industry to continue to promote recycled aluminium content, Lindsay-Walker said, given that recycled aluminium production results in 95% less carbon dioxide emissions than producing primary aluminium. Renewable energy Another way that some downstream aluminium companies are becoming greener is for them, like their primary counterparts, to use more alternative energy in their production processes. One example of this is the power purchase agreement that Hydro has recently entered into with Competitive Power Ventures (CPV) to start supplying 48 MW of power from its new Maple Hill solar farm to cover a substantial amount of Hydro’s Cressona, Pennsylvania, extrusions plant’s power needs. Jean-Marc Moulin, director of sustainability for Hydro’s extrusions business unit said that this will allow the company to reduce indirect emissions at Cressona by 12-15%. Some other companies are looking at similar power purchase agreements and/or either putting solar panels or wind turbines on their roofs or nearby. One example, Brown pointed out, is Aluminum Insights, a new extruder that plans to initially have a 500 kW solar panel on the roof of its greenfield facility in Indiana. While Kaiser currently sources electricity for its Warrick can stock rolling mill in Indiana, which it acquired in 2021, from a coal-fired power plant, its spokesperson said the company has a project under way to change this source to a utility with a much cleaner energy grid factor through its access to renewable energy. “We are also reviewing the opportunity to partner with companies that specialize in the installation and maintenance of clean energy systems that could be used across Kaiser’s 14 plants,” the spokesperson said. Lindsay-Walker said that Novelis is in the process of developing a renewable energy roadmap, as well as to looking at potential ways to decarbonize its remelt process, which uses a lot of natural gas. “We are working with consultant and knowledge partners about how we can transition to electric arc furnaces and possibly the use of renewable natural gas,” she said. Hydro is also looking to replace some of the natural gas that it uses, potentially with clean hydrogen, Straface said, noting that Hydro has already formed a dedicated business unit to investigate the potential of doing so within the next five to ten years. “Replacing your gas burners with hydrogen produced using renewable power can really reduce the carbon footprint of your operations,” Moulin said. Recycling loops expand “The US aluminium industry has recently drastically increased its rate of recycling and the recycled content in its products and is continuing to do so,” Johnson said. This comes with companies being willing to put money into delivering their plans: “We have seen $4 billion in investments in recycling technologies over the past 10 years, including $800 million over the last six months.” This, Straface said, comes as companies both look to dig deeper into the pile of scrap – particularly post-consumer scrap – that already exists and to engage in closed-loop recycling. There has been an uptick in closed-loop recycling discussions between producers and their customers over the past two years, Novelis’ Labat pointed out, noting that this is not just automotive related. “That has always been the case in the can industry and while it is less common in the construction sector it has recently been growing there as well,” he noted. “It’s important that we implement more scrap take-back programs with customers and it’s critical that we promote mainstream awareness of recycling all types of aluminium, JW Aluminum’s Roush said, given how recycled aluminium is uniquely positioned to drive a true circular economy. “Recycled aluminium take-back programs are the gold standard for circular manufacturing,” he maintained. The Kaiser spokesperson noted that since 2013 the company has partnered with customers to revert scrap from several of its locations back to its Trentwood Rolling mill in Spokane, Washington. “As aluminium is a material that is part of the future solution, it is necessary to incorporate sustainable engineering into all of the industry’s capital going forward,” the Kaiser spokesperson said. One example of recent recycling investments is Novelis’ announcement that it is breaking ground this year on an advanced recycling center adjacent to the company’s existing automotive finishing plant in Guthrie, Kentucky, with an annual sheet ingot casting capacity of 240,000 metric tons. Labat said that when it comes online in 2024, it is expected to reduce Novelis’ carbon emissions by about a million tons per year. While mainly using scrap coming from the company’s automotive customers through closed-loop recycling, Labat noted that it is also able to melt post-consumer scrap. He said that ingots from Guthrie will either go to its Oswego, New York, or Logan, Tennessee, plants to be rolled into coils for Novelis’ automotive customers. “This either saves us from buying ingots from primary aluminium suppliers or from buying aluminium coils from other producers,” he explained. Casthouse investments Brown noted that there have also been five or six new cast houses, or major cast house expansions, at US extrusion companies over the past two years, with more such moves likely. For example, Hydro, which has nine cast houses in the US, plans shortly to start construction of a recycling plant in Cassopolis, Michigan, that will have the capacity to produce 120,000 tonnes per year of extrusion ingots and will mark the company’s first large-scale production of its low-carbon CIRCAL product, which is based on 75% post-consumer scrap, when the facility comes online in 2023. “A major reason why we operate our own cast houses is that recycling more allows us to have better control over our supply chain while also allowing us to reduce our Scope 3 emissions,” said Moulin, who said that given that it is believed that 55% of the North American market is serviced by recycled or remelted billet, 70% of which is made from scrap, that indicates that the average recycled content for the North American extrusions industry is about 38.5%. A lot of decarbonization, however, falls upon the primary aluminium that the downstream producers buy, especially given that, as Aboud noted, it is through the primary producers’ Scope 2 emissions that most of the carbon really gets into the system. “Companies that are lucky enough to be in regions with a high degree of renewable energy production, such as Canada, Netherlands, Norway and Russia, have a big advantage,” he said, “Meanwhile companies in regions where a lot of the energy comes from fossil fuels have less attractive carbon footprints.” While in some cases their options are limited, as they are at the mercy of the natural resources that surround them, he said that some companies have recently started to put up solar or wind farms to power their smelters or are investigating using clean hydrogen or clean methane as a possible alternative power source. He also said that every primary producer is at least looking at increasing their products’ recycled content as another way to improve their carbon footprint. “It is incredible to see the level of momentum there has been around sustainability in the US downstream aluminium market,” Lindsay-Walker said, predicting that domestic companies will probably continue to make further progress going forward, given that not only companies need to invest more in sustainability to meet the goals that they have set for themselves, “But our customers and our investors are also holding us accountable.” Mothersole said that there is also a strong incentive for US downstream aluminium companies to become greener with the climate change initiatives and energy transition policies that are being pushed by the federal government.

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