Alcoa in low-carbon aluminium supply deal with Gränges

United States aluminium producer Alcoa Corp will supply low-carbon aluminium rolling slab to Gränges AB as part of the Sweden-based rolled products producer’s goal of cutting carbon emissions across its supply chain.

Produced at hydroelectric-powered aluminium smelters, Ecolum slab is part of Alcoa’s Sustana range of low-carbon products and guarantees no more than 2.5 tonnes of carbon dioxide (CO2) smelter emissions per tonne of aluminium.

On average, the aluminium industry generates 12 tonnes of CO2 emissions per tonne of aluminium at the smelter, analysts estimate.

When taking upstream emissions from bauxite mining and alumina refining into consideration, the Ecolum brand guarantees less than four tonnes of total carbon dioxide equivalent per tonne of aluminium.

“Gränges is committed to reducing our climate impact from a life-cycle perspective and thereby enhancing our sustainability performance,” said Sofia Hedevåg, senior vice president sustainability for Gränges, which services heat exchanger applications and other targeted markets.

“One of the key priorities in our climate strategy is to collaborate along the value chain and increase the sourcing and use of recycled aluminium and low-carbon primary aluminium, since such materials significantly reduce our products’ carbon footprint,” she added.

Alcoa did not specify how much aluminium it was supplying to Gränges, which has a production capacity of 460,000 tonnes per year split across five production sites.

Consumer drive

Aluminium consumers are increasingly looking to reduce their emissions through the supply chain as a result of government-mandated programmes and regulations across the world. At the same time, the pressure of public opinion has also driven the mining sector to operate in a more sustainable manner.

Efforts by aluminium firms to produce low-carbon metal that reduces emissions and also attracts a premium price have been around for a while. Other companies such as Rio Tinto, Norsk Hydro and UC Rusal have all launched low-carbon brands in the past few years, termed “green aluminium” by the industry.

According to Alcoa’s executive vice president and chief commercial officer Tim Reyes, demand for sustainably produced materials is growing, with customers acknowledging that it is worth paying extra for these attributes.

“With our Sustana line of products and certifications from the Aluminium Stewardship Initiative (ASI), we are able to support the demand for sustainably produced metal,” Reyes added.

In early 2020, Alcoa was certified by the ASI to market products under its chain of custody standard.

The chain of custody certification covers three key areas of the supply chain: from the mine to aluminium casthouse, from scrap to casthouse, and semi-fabrication and manufacturing to final product.

Alcoa has said it anticipates enlarging its offer of sustainable products in the coming year, certifying additional locations to ASI standards and developing additional value for its customers.

The Sustana range also includes Ecodura billet, which can be used in building and construction products. The billet has a minimum 50% of recycled content, not including internal scrap or primary remelt, and is produced with as much as 95% less energy.

Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 10.5-11.5 cents per lb on July 21, up 2 cents from the previous week’s assessment at 8.5-9.5 cents per lb and its highest level since April 13.

Traders raised offers due to a bullish sentiment on the premium and a wide contango on the London Metal Exchange’s cash/three-month spread.

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