What the Aluminum Industry Has to Say About Climate Change

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Written by Frank Maxwell

The COP21, with its substantial international buy-in and propelled by a palpable sense of urgency, offers both public and private actors the chance to make real changes in meeting the planet’s energy needs. Before they leave Paris, the world leaders at COP21 will need to determine how best to move both developed and developing economies toward clean energy sources such as hydro, wind, and solar. By switching out fossil fuels and cutting emissions, COP21 could also make other major industries far more environmentally friendly and sustainable. However, if the measures and standards that come out of the gathering aren’t stringent or binding enough, whatever progress is made during the Paris meetings will be undone by developing countries heavily reliant on oil or coal.

The International Energy Agency predicts that developing nations will be responsible for the a 33% rise in energy demand by 2040, underscoring the need to ensure that these countries and their industries are on board and have the funds to reduce the amount of energy produced from fossil fuels. The aluminum industry, whose final product is one of the world’s most recyclable products, offers a good example of a high-energy consuming industry, but one which has the ability to contribute to a reduction in global carbon emissions.

Approximately 30% of the costs of production of aluminum, used in everything from Nespresso capsules to Aston Martin cars, stem from energy costs, and as global demand for aluminum is set to rise by 3-4% over the next decade, it has become all the more vital to guarantee the emergence of a sustainable industry.  In a recent paper, AluWatch offers a succinct overview of how positive steps taken to achieve a cleaner aluminum industry in North America and Europe are currently being undermined by fossil fuel use in China. The paper demonstrates how North American and European aluminum producers have successfully cut energy usage and emissions by relying largely on hydroelectric energy. In Europe, where 84% of the 113,000 gigawatt-hours used by the industry comes from hydropower, Norway’s national aluminum company Norsk Hydro has relied almost entirely on hydroelectric since its foundation in 1963. Similarly, Russia’s UC Rusal, are looking to leverage the same energy source. Rusal, which accounts for 9% of global production, partnered with RusHydro to invest $2.6 billion in a hydroelectric plant on the Angara River in Siberia. Overall only 6% of the energy Europe uses to produce aluminum comes from coal.

These gains, while encouraging, mean little when placed next to China’s aluminum-fossil fuel nexus. China’s slice of global aluminum production skyrocketed from 10% at the start of the 2000s to as much as 60% now. The Chinese aluminum industry gets 90% of its energy from coal; those 336,000 gigawatt-hours are three times the entire scale of energy usage by the industry in Europe. Given the sheer size of the aluminum industry (and other comparable industries) in China, a concerted switch to hydroelectric power would do wonders for the country’s bad air pollution issues. The Chinese government is, admittedly, already investing heavily in hydropower infrastructure. Even so, its insistence on building new hydroelectric dams in remote areas and transferring their electricity over long distances (and poorly built grids) mean the country is wasting enough power to power both Britain and Germany. Were China’s hydroelectric potential fully put to use, it could double its current output and cut coal use by 500 million tons. The need to reduce pollution in China’s smog-choked eastern cities is urgent. Just in the past week, authorities in Beijing were forced to close schools and keep many cars off the road because the air quality index stood at 10 times the recommended levels.

Similarly, India, which has been vocal proponent of ‘climate justice’ and insists that climate change also be viewed in the context of the past, largely relies on coal to power its aluminum smelters. But India has argued that there will be no compromise on the Common but Differentiated Responsibilities (CBDR), which set apart poor and rich nations for fixing responsibilities and distribution of finance, and is dead set on ensuring that the Paris talks do not undermine growth as the country retains its position as the world’s fastest growing major economy. In this regard, India is defensive of its domestic coal use, for the aluminum industry in particular, and argues developed nations must guarantee their responsibility in securing $100 billion a year from 2020 to ensure that India and 120 other developing nations are able to cope with the switch toward cleaner energy resources and the effects of climate change.

Even in the European Union, with its ambitious emissions pledges and the embrace of clean energy by some industries (like aluminum), impressive gains made in Western Europe stand in sharp contrast to an enduring reliance on coal in the former Soviet bloc and Warsaw Pact countries. In Poland, where coal still provides 80% of the country’s electricity, new prime minister Beata Szydlo was quoted saying: “we obviously want to protect the climate, but only to the point that it won’t hurt the Polish economy.” As COP21 draws to a close, the delegations present will need to do their best to show developing nations that the choice is by no means either-or.