Aluminium's green dilemma: Import scrap of boost metal production at home?

Aluminium’s credentials as a green metal, which its rival steel in many applications will be shy of claiming, rest primarily on its endless recyclability. Unlike in North America and Europe where recyclers command respect from the community for environment caring, recycling of domestically produced and used aluminium is yet to gain momentum.

A sore point with the country’s three aluminium makers is that of total imports of 1.9 million tonnes (mt) of the silvery white metal during 2017-18 as much as 1.1 mt were scrap. Large arrivals of foreign origin scrap in India are aided by low import duty of 2.5 per cent while the impost on primary metal is 7.5 per cent.

Aluminium Association of India wants an identical import duty of 10 per cent on scrap and primary metal. Since big imports restricted Indian aluminium production to 3.5 mt tonnes last year leaving a capacity of 600,000 tonnes idle, the industry also wants the government to consider quantitative restrictions on foreign metal arrivals. In support of higher duty and quantitative restrictions, an industry official says Odisha based National Aluminium Company and Vedanta Aluminium are steadily raising production from already commissioned capacity and they should find local market for the incremental output. In the meantime, Hindalco’s two new smelters Mahan in Madhya Pradesh and Aditya Aluminium in Odisha are operating at a rated capacity of 360,000 tonnes each.

Even while converters in the downstream will staunchly oppose import restrictions sought by the industry, the fact remains the metal produced from scrap is a lot more ‘green’ than primary aluminium. This is because making aluminium from bauxite requires huge amounts of electricity and the greenhouse gas emissions are maximum if the source of energy is coal-fired power. In our country, the smelter, refinery and mining operations are all powered by thermal electricity unlike in the West where the energy source is principally hydroelectric. In West Asia, smelters draw energy from gas-based power units.

The accepted industry norm is if aluminium is produced by using electricity generated by burning coal, then for each tonne of metal up to 18 tonnes of carbon dioxide (CO2) is released in the air. CO2 emissions are down to anything between five and eight tonnes when gas-based electricity is in use. But the winner all the way is hydroelectricity whose deployment in aluminium making keeps CO2 releases close to 2 tonnes per tonne of the metal.

Unarguably, the most eco-friendly way of making the white metal is by recycling scrap. Besides this least environment harming way of securing metal for reuse, it is established that products made of primary metal and recycled metal will turn out to be of identical quality. Recycling will, however, involve in some metal loss, but this is never more than 2 per cent. It is in places where communities and governments make a common cause with the industry for developing a robust collection system that recycling prospers. Companies such as Apple, Tetra Pak and Bosch, which are committed to raising their green footprint, prefer using recycled aluminium. Going a step forward, Apple is engaged in developing “new technologies that allow it to reuse and recycle materials in its products and processes.”

In the Indian organised sector, Hindalco is the only one engaged in producing metal by recycling of scrap at its Taloja plant with a capacity of 20,000 tonnes. But its wholly-owned subsidiary Novelis is the world leader in aluminium scrap recycling with manufacturing footprints in North and South America, Europe and Asia. Incidentally, Novelis plant in Germany with a capacity to produce 400,000 tonnes of secondary aluminium from scrap obtained from across Europe is the world’s largest. Growing global interest in the recycling of scrap is because the energy needed to make secondary aluminium is just 5 per cent of the energy used to produce primary aluminium.

An industry official says world production of aluminium contributes close to 1 per cent of total global emissions of CO2. As the vast majority of the aluminium industry’s carbon emissions come from electricity generation, especially by way of burning coal, industry leaders in the West such as Russia’s Rusal, which makes about 7 per cent of the world’s white metal, Norway’s Hydro, Alcoa of the US and Anglo Australian Rio Tinto have strengthened their access to hydropower.

Rusal with the advantage of generating electricity by harnessing Siberia’s river waters is working to use only ‘clean energy’ by 2020 against the present about 95 per cent. In its pursuit to make its aluminium production as green as possible, Hydro is in the process of acquiring Rio’s 210,000-tonne smelter in Iceland where all electricity is generated from hydropower and geothermal energy. The provocation for aluminium makers to use clean energy is because growing numbers of customers, under pressure from governments and communities want to use only green metal to make products, thereby reducing their carbon footprints.

Having the benefit of access to hydroelectricity and progressive improvements made in the traditional smelting technology to contain carbon implications, Alcoa, Rio Tinto and Rusal have in recent times introduced “low carbon metal,” which commands a premium price. “These companies are selling a portion of their production as low carbon metal for a niche market. But we mustn’t lose sight of the fact that aluminium is a big volume game where China in 2018 will alone have a share of 36 mt of the expected global output of 66 mt. Chinese smelters rely on coal for 90 per cent of their energy needs. More than anything else, aluminium’s claim to green metal rests on its infinite recyclability,” says Vedanta Aluminium CEO Abhijit Pati.

Thanks to China and India, aluminium will continue to be made predominantly by using coal-fired electricity. It is in this context that the global industry attention is focussed on the recently announced joint venture (JV) between Alcoa and Rio Tinto to develop a process that will dispense with carbon anode based smelting. Seeing the potential to eliminate emissions of 1.6 tonnes of CO2 per tonne of metal at the anode that will further improve the green appeal of the white metal, Apple and governments of Canada and Quebec are lending financial support to the venture called Elysis. Once the JV is ready with the technology to make emissions-free metal, expect large scale retrofitting of operating smelters with it everywhere.

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