Now That You’re Asking Where Your Supplies Come From, We Should Talk.
The following Romco article is also featured in AlCircle’s “Green Initiatives: Road to a sustainable aluminium industry” Report (Pg 46).
As the world faces a climate crisis amidst a shortfall of both energy supplies and critical metals, difficult decisions are being made to meet growing supply gaps without risking new dependencies on unsustainable producers or compromised geopolitical actors. A problem for some; especially in light of the Russian invasion of Ukraine.
Best resource practice shouldn’t be dictated by current events, but that’s not always simple; A hard lesson being learned in the aluminium industry with the effects of short-term thinking being felt. On top of increases in inflation, energy cost increases, and supply shortfalls, we have seen an EU import ban on Russian oil, the USA has announced a potential 200% tariff on Russian aluminium (starting March 10), European production closures (see below), and more scrutiny than ever on ESG credentials for investment.
European Production Closures
Norsk Hydro has closed their Slovakian plant Slovalco as well as reducing production by 110,000-130,000 across 2 of their Norwegian plants; Talum in Slovenia have reduced output by 80%; Alcoa’s Lista smelter in Norway will reduce output by a third; Speira GmbH is contemplating halving production; G.A. Roeders GmBH plans to alter shift and production patterns to incorporate temporary shutdowns in order to maintain output and save on energy bills. In total, such reductions equate to 1.36 million mt, or a drop of 13.8% compared to total capacity
Big Changes Underway — Where Do You stand?
Despite these problems, aluminium demand is predicted to continue rising; as much as 80% by 2050. Problem is, where is it going to come from? And how much is going to cost the earth (and our wallets) to produce?
In 2021, for every ton of aluminium produced, 18 tons of CO2 was emitted, totalling a grand 1.775 billion tons. That’s roughly 2% of man-made carbon emissions, more than the entire aviation industry to produce just one material. Aluminium is an incredibly dirty resource compared to almost any other base metal. Why? Because not only is it an energy intensive process to produce aluminium, but currently over 60% of the energy required is produced from burning coal, the dirtiest fossil fuel.
This will have to change with the Paris Climate Agreement legally binding 196 parties to ensuring climate increases are limited to 1.5 degrees Celsius, and growing legislation interventions such as CBAM.
Sustainable sourcing is not just how it’s made, but where it comes from. The damage to biodiversity through commodity extraction has never been greater — deforestation and land clearing for bauxite mining site is reaching new levels, having a detrimental effect on species diversity, with known and undiscovered species becoming or nearing extinction. Polluting the seas with chemicals and material waste has done the same to marine life.
Finding new and responsible methods for producing our materials has begun, but there’s a long way to go. Now that you’re finally asking where your supplies come from, we can have an honest conversation.
The Future Of Aluminium Has To Be Green
Unlike some commodities, aluminium can be recycled, repurposed, reused, and even recycled again, with relatively zero drop in quality. The sustainable credentials are evident and needed more than ever for the future of manufacturing.
Aluminium is one of the most important elements in our efforts to decarbonise. It’s vital for electric vehicles, grid expansion, sustainable packaging, replacing of plastics, sustainable housing, renewable energy, and future potential innovations.
The Romco mission is to transform the production of metals to help solve the climate crisis. We do that by producing secondary materials from emerging markets, replacing the need for environmentally costly primary production all over the world. Our aluminium and copper recycling facilities are capable of reducing over 11,200 t/co2 per month compared to primary production — that’s the equivalent of saving 25,930 barrels of oil from being burned every month.
We’ve switched to CNG for our production to reduce our emissions further and are currently exploring the viability of green hydrogen production on the continent of Africa to further eliminate our emissions footprint. We believe Africa can be a powerhouse in sustainability, so we’re starting with green aluminium.
Environmentally speaking, producing 1mt of secondary (recycled) aluminium saves 8mt of bauxite, is 95% more energy efficient, and emits 95% less CO2 than primary mining, and diverts 7.62 cubic metres of landfill. There’s also the benefit of not having to deal with treating toxic dross (a by-product of aluminium production). The maths are simple and green technology has never been more crucial for a changing industry.
But to Romco, green means sustainable in a far greater sense than just emissions. We also build sustainable infrastructure for a truly circular economy in the communities where we work in. Through our Small Business Buying Program, we develop local organisations’ and entrepreneurs’ ability to participate meaningfully in the secondary supply chain to build their businesses alongside ours — increasing agency and financial independence for responsible organisations.
It’s about building a fully sustainable picture that creates longevity for green resources in a changing market.
The Big Questions
The market is changing. Are you ahead of that change? Are your resources sourced responsibly? Have you considered the emissions, production, producer, environment, and ownership of your resource partners? If you’re a purchaser of aluminium, is it green? Is it ultra-low carbon? Is it sourced ethically? Is it vulnerable to future government or legislative intervention?
Yes, emissions are a huge part of why secondary materials are better for the environment than primary ones, but social responsibility, governance, wider bio-diversity and community impact are also vital considerations to making the overall ‘green’ product truly sustainable.
If you’d like to talk about how we are rising to the challenge of meeting the global commodities supply gap sustainably and ethically, you can subscribe to our news at https://romcometals.com/news-insight/