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The coalition comprises the world’s leading aluminium producers, consumers, and original equipment manufacturers (OEMs), and the sustainability measures will include reducing emissions, increasing recycling and other UN Sustainable Development Goals.
The launch makes the aluminium industry the first to move toward net-zero carbon in a way that contributes to all UN Sustainable Development Goals, the IAI added.
The industry association has created a roadmap called Aluminium Forward 2030 for the initiative, which is backed by 25 producers plus 20 downstream companies and OEMs, including automotive firms Jaguar Land Rover and Volvo Cars.
The initiative follows discussions with various players in the beverage can, automotive, electrical, transport and construction markets, the IAI noted. Other companies supporting the initiative are beverage can producers Ball, Crown Holdings and Ardagh Metal Packaging; Cable producer Nexans; and aluminium technology company Gränges.
Consumer demand for low-carbon aluminium initially came from the automotive sector but is now expanding into other areas. A growing number of market participants have noted the use of Fastmarkets’ low-carbon differential in long-term contracts for low-carbon aluminium.
Fastmarkets’ price assessment for the low-carbon aluminium differential P1020A, Europe was $10-30 per tonne on Friday March 3, unchanged from the previous month.
But consumers are increasingly seeking to achieve other environmental, social and governance (ESG) credentials included under the UN Sustainable Development goals.
This is in part due to legislation, such as the EU Battery Regulation, the German Battery Pass, and the US Inflation Reduction Act (IRA), which are creating a global regulatory push for digitalization that is merging with the investment community’s lending requirements.
In October 2021 the LME launched LMEpassport, a new digital register for physical metals data that formed part of a sustainability package announced in December 2020. The exchange has also said it will delist brands that do not comply with its responsible sourcing rules.
As the introduction of more low-carbon aluminium brands continues to grow, the addition of further sustainability criteria will likely add impetus to green premiums for these products. Fastmarkets first launched low-carbon differentials in March 2021 for P1020A and value-added products (VAP).
According to the IAI, reducing greenhouse gas emissions and combatting climate change have become priorities for the aluminium industry. But the sector needs to move comprehensively toward net-zero carbon in a way that addresses all other aspects of sustainability, it said.
“The world is confronting a climate crisis and reducing greenhouse gas emissions has become a priority for nations and businesses,” IAI secretary General Miles Prosser said.
“But the race to net zero carbon is multifaceted and needs to equally embrace other global sustainability challenges, including social inequalities, biodiversity loss, circularity, and access to fresh water. The IAI recognizes that net zero carbon must also deliver on other sustainability issues,” he added.
The 17 UN Sustainable Development goals include clean water and energy, responsible consumption and production, social equality and biodiversity.
The IAI said it has also partnered with Fast Forward Zero, founded by Jerome Lucaes, to provide strategic guidance and ensure a wide representation of the aluminium-consuming segments. Lucaes was most recently at Rusal and has previously worked at Rio Tinto, Alcan and Pechiney.
In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Sign up today to receive Andrea’s content as it is published.