North American aluminium industry needs $60 billion investment to reach net zero by 2050: Aluminum Association

“Achieving the International Energy Agency’s net zero by 2050 goals would require the North American industry to reduce emissions 24% by 2030; 63% by 2040 and 92% by 2050 – a period during which output is projected to increase by around 80%,” the report said.

It will take approximately $1 trillion for the global primary aluminium production value chain, mostly in power supply and smelters, to reach these 2050 targets, according to the report.

With North American primary aluminium accounting for about 6% of global production, an estimated $60 billion investment will be needed for it to reach net zero by 2050.

But aluminium producers in the region have a “first mover” advantage due to the use of low-carbon primary aluminium, increased recycling and voluntary emissions reductions efforts over the past decades, according to the report.

Substantial new investments in recycling capacity in the US have been announced in recent years. Meanwhile, Canadian aluminium producers have the lowest carbon footprint in the world through their use of hydro-powered electricity and innovative technologies, according to the Canadian government.

In March, the US government selected a primary green aluminium smelter project by the US-based Century Aluminum to start award negotiations under the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA.)

“Average carbon emissions to produce a pound of aluminium in North America have dropped by more than half since 1991, giving us a significant head start over the rest of the world and an opportunity to lead the way producing lower carbon metal,” Aluminum Association president Charles Johnson said in a statement.

According to research by the International Aluminium Institute (IAI), announced in a press release on February 28, the greenhouse gas (GHG) emissions intensity of primary aluminium production has been declining since 2019.

This is thanks to significant investment by the industry in research, development and implementation of new technologies, innovative techniques and changes in energy supply, according to IAI.

“But we know that much more must be done to meet net zero targets by 2050,” Johnson added.

The report identified three key pathways to reach the 2050 emissions reduction targets:

• Aluminium production improvements: New primary aluminium production technologies, changes to current alumina production methods and energy efficiency improvements at the plant level.
• Alternative Fuels and Carbon Capture: Transition to new energy sources, electrification of furnaces and capture and storage technologies.
• Grid Decarbonization: Deployment of clean energy technologies to decarbonize the US electric grid.

The report also found that up to 287 million tonnes of carbon dioxide emissions could be eliminated by 2050 through more efficient recycling.

Whether you are a buyer or seller of base metals products, it’s important to keep track of the forces impacting market conditions and price movements. Fastmarkets’ base metals price forecasts and analysis can help you easily break down complex market conditions to understand the forces influencing price volatility – and act with confidence. Download a free sample of our base metals forecast today.