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The use of blockchain technology will be key to the ability to track and trace Scope 3 emissions as the world moves along the decarbonization pathway, the executive chairman of En+ Group said.
Speaking at the Fastmarkets International Aluminium conference on Friday September 3, Lord Gregory Barker said that although a focus on Scope 3 emissions has not yet been fully developed, technology will be essential.
Scope 3 emissions are indirect emissions produced in the supply chain, including from processes that a company does not own or control, such as business travel, production of purchased materials, products and services, waste handling and water treatment. They form part of the greenhouse gas (GHG) Protocol Corporate Standard, the world’s most widely used GHG accounting standards.
“Scope 3 really is quite challenging,” Barker told delegates. “Some people say, ‘It’s not something we have control over,’ but technology is actually changing that, particularly blockchain, and is bringing new possibilities of how we can ensure we track our aluminium and the products right the way down the supply chain.
“Blockchain is an emerging industry at the moment, and it’s not at all clear who’s going to dominate that space,” he added, “but what we can say with some certainty is that, before too long, the technology will exist to track and quantify the emissions of certain materials right the way down the supply chain to the end-user. That’s something the aluminium industry must embrace.”
But Scope 3 emissions appear to be a little far away at the moment, he said, pointing to the EU’s proposed Carbon Border Adjustment Mechanism (CBAM), which only takes Scope 1 emissions into account.
Scope 1 emissions are direct GHG emissions that occur from sources that are controlled or owned by an organization, including through fuel combustion in boilers, furnaces and vehicles. Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat or cooling.
“The EU’s CBAM only wants to go as far as Scope 1 emissions, and when you’re talking about aluminium, where the energy content is so huge, not to include the energy input in Scope 2 is nonsense,” Barker said.
“Scope 3 is very important, and technology is going to be key, blockchain is going to be key. But as a sector, it’s Scope 2 for me that will be the most important for now. Then Scope 1 emissions – what actually happens in the smelter – are the next stage, and that takes us all the way back to the inert anode,” he added.
The En+ Group’s UC Rusal company is working on inert anode technology and has already produced aluminium with less than 0.01 tonnes of CO2 emissions per tonne of metal at its Krasnoyarsk aluminium smelter in Russia.
Barker noted the “extraordinary transformations” in clean energy that have been seen in the past decade or so, citing the 90% decline in the cost of solar photovoltaic energy since 2009, and the expectation that, by 2025, wind power will be the cheapest form of electricity generation worldwide.
“Technologies which just a few years ago were seen as very much on the periphery of the energy sector – or, at best, a diversion – are now mainstream, but also highly cost competitive. That’s something all of us in energy-intensive industries need to wake up realize,” he said.
En+ plans to announce its net-zero-emissions roadmap on September 22 and has already committed to a decline in CO2 emissions of at least 35% by 2030 compared with 2018 levels, and net-zero by 2050. Barker said that the roadmap is being stress-tested with its stakeholders throughout the supply chain as well as external experts, and would be updated at regular three-year intervals, potentially to increase the ambition.
“As science changes, innovation becomes available and commercialized, so we will iterate our plan. It’s really important, if you have a credible 2050 target that’s going to be taken seriously, that you also have a credible 2030 target,” he said. “You can’t have one without the other. We’ll be putting the flesh on the bones of both of those on September 22.”