“We are positioning our alumina in the low-carbon market,” he said. “The market will have to pay a premium for it. Our alumina is already chosen because of its good quality and, with low emissions, we can differentiate ourselves in the market… We are ahead of the game and [we are] pioneers.”
A premium on the cost of green alumina was becoming increasingly likely, with producers actively seeking incentives to switch to low-carbon energy sources, Fastmarkets learnt at its International Aluminium conference in Athens, Greece, held September 10-12, 2024.
Fastmarkets low-carbon aluminium prices
Fastmarkets already prices low-carbon aluminium differentials, launching its first European low-carbon aluminium differentials for P1020A and value-added products in March 2021, on growing demand for transparency in this evolving sector.
Differentials for low-carbon material in the US, Japan and South Korea have since followed, with this becoming a global trend.
Fastmarkets’ monthly aluminium low-carbon differential, P1020A, Europe, was most recently assessed at $0-20 per tonne on January 3, down from $0-30 per tonne on December 6.
The aluminium low-carbon differential P1020A, US Midwest, was assessed at 0 cents per lb on January 3. The premium has been at that value since it was launched in November 2023.
The declaration by Neves was not the first time that Norsk Hydro has indicated that it expected the market to pay premiums for greener, more sustainable products. In March 2024, the company highlighted its opinion after a new solar energy plant started to power the Alunorte alumina refinery in Brazil.
On January 6, Norsk Hydro announced the implementation of two new electric boilers at Alunorte.
The new boilers are based on renewable energy and have replaced coal-fired boilers. Alunorte has signed long-term power purchase contracts with the Brazilian Mendubim solar plant and the Ventos de São Zacarias wind farm.
“These come in addition to one electric boiler installed in 2022,” the company said. “The conversion from coal to renewable electricity will [eliminate the emission of as much as] 550,000 tonnes of CO2 per year… This reinforces Alunorte’s position as one of the lowest emissions plants in the alumina industry.”
“We are implementing a path toward alumina that will have zero carbon emissions, which is our ultimate goal,” Neves told Fastmarkets. “We don’t just have the talk, we have the materialization of a journey [toward] decarbonization that we have established.”
According to Neves, Alunorte focused on two decarbonization projects last year. It converted to natural gas seven calciners and six boilers that used to operate with oil, reducing emissions by around 700,000 tonnes of CO2 per year. And with the latest installation of two electric boilers, a further 550,000 tonnes of CO2 emissions per year will be cut.
This meant a total reduction of 1.2 million tonnes of CO2. Before those projects, emissions were around 4.1 million tonnes of CO2 per year.
According to Neves, Alunorte has reduced its carbon emissions by around 30% with the two projects, but the company’s goal was to achieve a 70% cut by 2030, and net-zero Scope 1 and 2 emissions by 2050.
“What is missing is to completely eliminate coal,” Neves said. “Another part of the boiler [unit] still runs on coal but the plan is that it will be taken out of operation by 2030. We already have some initiatives under way. Perhaps we will introduce more electric boilers.”
Norway-based Hydro invested 2.4 billion kroner ($212.3 million) in Alunorte’s transition from oil to natural gas, while the two new electric boilers required an investment of 580 million kroner ($51.3 million).
Alunorte, the world’s largest alumina refinery outside China, is located in the city of Barcarena, in Pará state, Brazil. The refinery has nominal alumina production capacity for 6.3 million tonnes per year.
Part of the alumina produced is exported and the remainder is supplied to the Albras plant, also in Barcarena, which produces aluminium ingots.
Current alumina prices
Fastmarkets’ Australian alumina index remains at elevated levels.
But according to Fastmarkets research analyst Yang Cao, Australian alumina prices have started to fall since reaching an all-time high of $805.83 per tonne on December 4 last year.
“We expect both Australian and Chinese alumina prices to trend lower in January,” Cao said, “from last December’s averages of $708.06 per tonne and 5,768 yuan per tonne.”
Fastmarkets calculated its daily benchmark alumina index, fob Australia, at $675.52 per tonne on Tuesday, compared with $670.44 per tonne a week earlier.
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