Emissions associated with the consumption of electricity alone vary from just above zero, when hydro, renewable and/or nuclear power is used, to around 18 t CO2e per tonne of aluminium with inefficient coal-fired power stations.
This insight is the second part of the CRU explains series smelting emissions, following the copper versus nickel emissions (Available to CRU subscribers).
Power represents a significant cost in primary aluminium smelting, around 30% of all site costs. New improved smelting technologies have decreased electricity consumption across the industry, primarily in China where financial incentives have been the greatest. Process emissions have also reduced, they are now typically around 2.0 t CO2e per tonne of aluminium, while they averaged 2.6 t CO2e ten years ago. Looking at the industry as a whole, however, the capacity increase in China has led to more and more metal being produced using coal power, balancing most of the emissions reduction progress.
Options regarding power supply are usually relatively limited for aluminium smelters. There has been noticeable shifts toward using wind and solar as sources of power for smelting, which was unseen only a few years ago. However, the share of these renewable energies used to power aluminium smelting is still marginal on a global scale.
Sourcing lower-carbon alumina is an option for aluminium smelters to reduce their overall footprint. Alumina carries a carbon content that ranges from 0.5-3 t CO2 /t Al, depending mainly on where it is sourced.
The spike in copper prices has caused more manufactures to examine substituting out the red metal. The price differential between the copper and aluminium is at its highest level since 2011. Aluminium is less conductive but importantly lighter. Generally, one requires only around half the weight in aluminium to replace the same weight of copper. As such, using aluminium can result in substantial cost savings.
While raw material prices have been the main driver of change, other factors such as technological advancements, legislation, weight and diameter considerations, retooling costs and security of supply all need to be considered. In the future, the quantity of emissions produced per tonne of raw material will not be neglected either. Considering the weight difference, substituting copper with aluminium carries a 0% increase in carbon dioxide emissions. As the world decarbonises, copper’s more efficient thermal and electric conductivity could also act as a barrier to exit in some applications.
Deciding to substitute a product from one material to another is not always an easy choice, especially in complex supply chains. The pace of substitution away from copper has slowed in recent years. Many markets have already seen large moves out of copper, and these losses are likely permanent. With high price ratios likely to persist, more companies are examining whether now is the time to make the switch. However, in a world striving for greater efficiency and emission reductions, the decision to change has become even more complex.Explore this topic with CRU