4 targeted initiatives ramping up decarbonization of aluminium

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Pernelle Nunez, Deputy Secretary General and Director of Sustainability, International Aluminium Institute, Jelena Aleksić, Lead, Industry Decarbonization, Aluminium and Non-Ferrous Metals, World Economic Forum

• COP28 saw a number of aluminium sector-related initiatives bringing collaborative approaches to emissions transparency, ambition, reporting, accountability and financing.
• An estimated $1 trillion is needed to align the sector’s emissions with the Paris climate trajectories over the next 25 years.
• A global call to action for 100% recycling of aluminium beverage cans by 2050 would bring a potential saving of over 60 million tonnes of CO2e emissions per year.

As the world descended on Dubai for COP28, a strong aluminium industry contingent gathered to take part in the launch of a number of key initiatives. With the roadmaps and pathways to decarbonization for the sector set and technology needs made clear, COP28 provided the ideal backdrop for the aluminium sector to lay the foundations for the crucial years ahead.

Aluminium is an essential material for the energy transition and modern life; it is used in a wide range of applications from electrical infrastructure and low-carbon energy technologies to everyday packaging, transport, and machinery solutions.

Aluminium demand is expected to grow strongly over the coming decades with increased electrification, automation, and urbanisation. Consequently, the industry will have to grapple with the ongoing challenge of decoupling growing production from greenhouse gas (GHG) emissions. The sector currently emits about 1 billion tonnes CO2e per year.

The aluminium industry has seen major shifts over the past couple of years and is moving from ambition-setting to increasing implementation and action. There has been activity across all major producing regions aligned with the sector’s three key decarbonization pathways, with increasing integration of low-carbon electricity, developments to eliminate direct and thermal emissions, and through increased recycling and resource efficiency innovations.

To continue to progress and roll out new technological and structural changes, cross-sector collaboration, increasing demand for low-carbon aluminium, mobilisation of significant capital, and enabling policy environments are critical to success. The need to move ahead on each of these fronts, as well as coordinate action across them, was a recurrent theme for the sector at COP28.

To overcome barriers to the sector’s decarbonization ambitions, four key initiatives were launched at COP28.

1. The Industrial Transition Accelerator (ITA)

The ITA focuses on global cross-sector decarbonization efforts across industry, transport, and energy sectors. The International Aluminium Institute (IAI) sits on the ITA Leadership Council and will lead the efforts for the aluminium sector. ITA has four global priorities: advancing technological solutions, promoting green demand, articulating policy enablers, and engaging green finance. The ITA will endeavour to support existing initiatives such as the First Movers Coalition (FMC) which is collating a demand signal for low-carbon industrial products. Launched at the COP26 and co-chaired by the US Government and the World Economic Forum, the FMC is making a strong impact with a cumulative demand signal of over $16 billion in annual demand by 2030 made by its nearly 100 members through more than 120 offtake commitments. As such, the coalition advances the most critical, emerging climate technologies required to decarbonize the world’s heavy-emitting sectors, including in the aluminium sector.

2. Sustainable Aluminium Finance Framework (SAFF)

Echoing the ongoing need to better engage the finance community in industrial transition efforts, the launch of RMI’s Sustainable Aluminium Finance Framework (SAFF), delivers a much-needed tool for financial institutions to assess the emissions of their aluminium loan books. The framework was developed in collaboration with Citi, ING, Société Générale, and Standard Chartered, and in consultation with leading aluminium producers and organizations. An estimated $1 trillion is needed to align the sector’s emissions with the Paris climate trajectories over the next 25 years. As a result, for the aluminium industry to make progress, it is essential financial institutions can assess climate-alignment of proposed projects.

In addition to the multistakeholder efforts outlined above, two aluminium industry-led initiatives were launched at COP28:

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