If China wants to achieve its goal of net zero consumption by 2060, it should look to the aluminum industry and encourage its potential to use decarbonization technology.
Implementing decarbonisation technology in the aluminum sector could reduce carbon emissions from aluminum processing by 65% over the next 40 years.
Aluminum producers will need to adopt technology as needed, depending on geography, access to renewables and value chain, etc.
China is the largest producer of primary aluminum in the world, accounting for nearly 60% of the global market. At the same time, the aluminum industry contributes significantly to China’s carbon footprint, accounting for about 5% of the country’s total emissions. Therefore, aluminum producers must help China achieve its goal of net zero by 2060.
The carbon intensity of aluminum smelted in China, compared to other regions such as Europe, comes down to its reliance on coal-fired energy – over 80% of all energy used. However, creating low-carbon aluminum in China requires more than a shift to renewable energy sources; decarbonization technologies will be needed to address direct emissions from aluminum processing in a scalable and commercially viable manner.
An April 2022 study by Accenture and the World Economic Forum outlined decarbonization technologies for the aluminum industry, their maturity in China and challenges to commercial viability. Manufacturers will need a variety of technologies developed and deployed in the short, medium and long term that could reduce processing emissions by 65% over the next 40 years, ranging from recycling capabilities to hydrogen development.
Short term solutions
Recycled – or secondary – aluminum produces about 5% of the emissions compared to virgin aluminum. Improving the collection, sorting and utilization of scrap aluminum can reduce the carbon footprint of the entire industry.
China has the world’s leading market share of secondary aluminum at around 35%, growing every year, although demand is relatively low at 16-20% of available material. Demand for secondary aluminum in China is likely to increase with a government-imposed cap on primary aluminum production capacity. Secondary aluminum production is already attracting two of China’s leading aluminum players, Hongqiao and Nanshan, moving away from their dominance by regional organizations with small market shares.
The cost of producing recycled aluminum in China is also lower at about $900 per tonne, with profitability expected to increase with global demand. Many downstream companies (eg car manufacturers and consumer goods companies) are already committed to using recycled aluminum in their products.
China has also started to develop a closed-loop recycling system, although it needs to reach a higher rate of scrap recovery and reuse; the quality of secondary aluminum must also be improved so as not to limit the end-use options.
Optimization of processes
Historically, Chinese manufacturers have used process optimization to reduce costs and emissions. Although these improvements will not result in a net-zero product, continuous improvement is needed, especially for facilities that are not currently feasible for decarbonization.
Inert anode technology is perhaps the biggest opportunity for industry to realize a step change in direct emissions. The replacement of carbon anodes with inert anodes during primary aluminum smelting globally accounts for around 10-15% of emissions in the sector. Without this, aluminum will likely never be a net-zero material.
However, the technology remains at a pilot stage: China lags behind its international peers, and sensitivity to intellectual property makes it difficult to learn from them; there is also a lack of cooperation in the Chinese market to develop inert anode technology.
Inert anodes are expected to become commercially available in China around 2035, achieving commercial competitiveness with carbon anodes after 2050. Currently, inert anodes cost over 250% more than carbon anodes, but the introduction of a carbon price could change the business case. Although there has been little or no regulatory support for inert anodes in the past, in February 2022 the National Development and Reform Commission released an Inert Anode Incentive Policy to encourage aluminum producers to act.
Mechanical vapor recompression
Mechanical vapor recompression (MVR) technology can reduce thermal energy consumption by up to 70% during alumina refining by reusing large amounts of steam. Although MVR will not result in zero emissions per facility, it may benefit sites that are currently difficult or impossible to transition from fossil fuels. Greenfield MVR is expected to become cost competitive with traditional 6-effect vaporization technology as early as 2026.
Chalco is trialling the MVR technology, which is rarely applied outside of China, although Alcoa has begun a feasibility study to use MVR in alumina refining in 2021.
Long term solutions
Carbon capture, use and storage
Carbon capture, use and storage (CCUS) technology can store carbon permanently or use it as input to other processes. And it is expected to be a major player in decarbonization efforts over the next 30 years as a proven technology with commercial application worldwide. However, it remains relatively untested in the aluminum sector.
CCUS can capture emissions from heat generation during alumina refining and process emissions, but its business case depends on the concentration of CO2 in the off-gas, which is low in aluminum smelting, leading to high costs.
CCUS adoption is growing rapidly in China, expected to account for about 22% of global capacity overall, but few have yet identified it for use in aluminum production, and domestic R&D efforts are yet to take off.
Green hydrogen is one of the only options available to eliminate carbon emissions due to high-temperature energy production required during the calcination stage of alumina refining.
The prohibitively high cost remains an obstacle to the expansion of this technology, as it is seven times more expensive than natural gas. Green hydrogen should become more competitive in the coming years as the costs of electrolysers and renewable electricity come down.
The development of green hydrogen technology is in its infancy in China and is mainly led by leading renewable energy companies.
Wettable cathodes reduce the anode-cathode distance during electrolysis in aluminum smelting, which provides an opportunity to reduce energy consumption by up to 25%. Despite its potential for cost savings, this technology will not allow a site to reach net zero.
Wettable cathodes have reached industrial scale for several aluminum companies, including RUSAL. However, there has been no significant development in China since 2012.
The critical role of Chinese aluminum producers in achieving China’s net zero consumption goals is undeniable. But each manufacturer’s decarbonisation path will vary by geography, availability of renewables, value chain and more.
In the meantime, industry-specific policy and government financial support are needed to stimulate further technological development and deployment. Yet the time for Chinese manufacturers to act is now, as investment is needed so that these technologies can at least reach commercial viability in the next ten years.
Source: World Economic Forum