“I like the trajectory for aluminium right now, much more than I did even two years ago,” Fisher said.
The UN has called for the need to reduce greenhouse gas emissions by 45% by 2030, and reach net-zero emissions by 2050, to keep global warming to “no more than 1.5°C – as called for in the Paris Agreement.”
This, according to Fisher, is going to require companies to choose more sustainable supplies to manufacture their products, including low-carbon aluminium.
“[In a number of] our plans and investments in rolling capacity that you see coming online, it is 85% recycled content that has been guaranteed on the sheet [and] it is green energy in the backdrop [that] is going to be fueling those facilities,” Fisher said.
It is not only low-carbon recycled content, but also low-carbon primary aluminium that is gaining momentum, according to Fisher.
Ball recently introduced an aluminium cup product that is close to carbon neutral and has 90% recycled content, with the remaining 10% made using low-carbon primary aluminium, Fisher said.
A number of primary aluminium companies have developed carbon-free smelting operations and technologies, and this allows Ball to use its products to manufacture close-to-carbon-neutral packaging, he added.
Alcoa and Rio Tinto have jointly developed “Elysis,” while Oslo, Norway-based Hydro developed “HalZero,” both aluminium smelting technologies that emit oxygen instead of carbon dioxide, according to the companies.
“Investments are showing up, the supply chains are committed,” Fisher said, noting that a number of associations are also involved in getting to some of these aspirational targets and that “there are offtake agreements and investments happening to ensure that that happens.”
Fisher added: “This is no longer a theoretical argument for us; we have plans to get there and I am confident we will get there in a shorter period of time than anybody else.”
Ball is working with its customers, who also need low-carbon aluminium packaging to meet carbon footprint requirements under the US Securities and Exchange Commission (SEC) and European reporting requirements, Fisher said.
The SEC is expected to finalize its ruling that requires companies to disclose their climate-related risks, such as their Scope 1, 2, and 3 emissions and their risk management practices, in April 2024.
Meanwhile, the EU’s Carbon Border Adjustment Mechanism (CBAM) has entered into effect, starting with a transition phase that runs until the end of 2025.
During the transition period importers will need to report the embedded emissions in their imports, but after January 1, 2026, importers will also need to purchase certificates at the average price of EU emissions trading system (ETS) allowances.
“We are kind of sprinting after this carbon neutrality in a way…everybody is going to have put up or shut up, and we are in a good spot to deliver,” Fisher said.
Fastmarkets launched its European aluminium low-carbon differentials in 2021. Fastmarkets’ aluminium low-carbon differential P1020A, Europe was trading at $10-25 per tonne on January 5.
Meanwhile,the aluminium low-carbon differential P1020A, US Midwest, which Fastmarkets launched on November 3, 2023, was trading at zero on the same day.
The next assessment for both differentials will be on Friday February 2.
To understand the complex market conditions influencing price volatility, download our monthly base metals price forecast, including the latest copper price forecasts today. Get a free sample.