The demand for “green” aluminium is on the rise. Global automotive, electronics, and packaging industry players who are fiercely competing to occupy a piece of mind-space of today’s environment-conscious consumers while getting a quick go-ahead from the regulators and investors are increasingly leaning towards low-carbon aluminium. Cashing on the demand, aluminium producers running hydro-powered or gas-fired smelters are charging a premium for their end product- low-carbon or “green” aluminium.
The change of the consumer preference towards low-carbon aluminium has long been awaited. According to the International Aluminum Institute (IAI) data, the amounts of hydro and coal power used to make aluminium stood roughly at the same level around 200,000 gigawatt hours each in 2005. A decade later the hydro figure had changed little, whereas coal had risen to around 450,000 GWh.
At a time when the whole world is pushing for a lower-carbon future, this change in the aluminium industry was badly needed.
Aluminium producers with sizeable hydro-power capacity such as Norsk Hydro, Alcoa, Rusal and Rio Tinto believe that the transformation is running in their favour. Kathrine Fog, a senior vice president at Norsk Hydro said, "We've seen this coming from the market, our customers, shareholders, financial markets, NGOs, you name it. That means in the end it will affect the bottom line."
However, the aluminium producers are not using the term “green” aluminium, but offering low-carbon guarantees instead, on their product. This is somewhat logical because the competitive edge lies in the production process and not in the metal. The smelting process for this variety of aluminium emits much lower volume of greenhouse gases including CO2.
The companies are yet to divulge the exact premiums but say it was "not hundreds of dollars a tonne."
Source: China Aluminium Network