The role of green aluminium in global supply chains

Posted on 31 Jan 2022 by Tom St John

Salman Abdullah, Executive Vice President at Emirates Global Aluminium (EGA), sat down with The Manufacturer’s Multimedia Editor, Tom St John, to discuss how low and no carbon aluminium can assist the manufacturing sector.

Manufacturers are under incredible pressure to improve the sustainability of their operations, especially following COP26. However, long and complicated supply chains that can involve thousands of suppliers across the world and can create real difficulties in terms of ensuring that end products are sustainable.

However, there are manufacturers that are making huge strides in decarbonising their operations. Emirates Global Aluminium, (EGA) is the first company in the world to make aluminium commercially with solar power, supplying companies as big as BMW.

Here, we ask whether low and no carbon aluminium is truly “the metal of the future?” Is it attainable to all manufacturers? And why is the environment, social and governance (ESG) aspects of low carbon metal supplying businesses so important to consider?

TS: How have current challenges such as supply chain issues etc, impeded manufacturers from pressing ahead with their sustainable efforts?

SA: What we’ve seen, I think, is a preview of what can go wrong in the supply chain when we have a planet-wide catastrophe with COVID-19. We’ve all seen the supply chain disruptions and challenges because of this. But we went out and we found masks, we introduced social distancing and then we found the vaccines – we can collectively get rid of it. If climate change and environmental impacts continue, there won’t be a vaccine for it. So, supply chain in the context of sustainability is a real challenge. If things start going wrong, it will be very difficult to put it back online.

Salman Abdulah Executive Vice President at Emirates Global Aluminium (EGA)

Overall, as an industry, we are seeing a big move towards sustainability from our customers, employees, employers, and stakeholders. It’s an important issue for EGA, and one which we have been working on for a significant amount of time. The challenge for our industry is to improve sustainability through aluminium production, because aluminium production requires quite a lot of megawatt hours – a lot of energy. From the supply chain perspective, getting hold of good clean energy is absolutely essential for the future.

TS: What sort of impact can green aluminium have in global supply chains?

SA: Just to give you a sense of numbers; when coal is used as fuel in the supply, the carbon intensity of the aluminium is double digit.  It could be 15 to 20 tonnes of CO2 per turn of aluminium. Whereas if you use gas fired, it is a single digit, which is a high single digit. But if you use renewable energy, then that supply of renewable energy reduces to low or no carbon. It would be around 4 tonnes of CO2 per tonne of aluminium, so there’s a big shift.

I think at the end of the day, my view is that we the consumer have to drive this, and the large, responsible manufacturing organisations should be sourcing low carbon metal from companies who give a lot of due diligence to all the environment, social and governance (ESG) perspectives of the business. I think going forward, if suppliers across the world, big and small, want to be part of these niche producers of responsible organisations, they have to pull up their socks and make sure they too follow the ESG criteria across their whole supply chain.

Around 10 per cent of EGA’s total production is sold domestically, and 26 UAE downstream companies use EGA metal to make products – from window frames to el
Around 10 per cent of EGA’s total production is sold domestically, and 26 UAE downstream companies use EGA metal to make products – from window frames to electric car batteries

TS: Will aluminium be relevant to all manufacturers and what are some of its main uses?

SA: We see it as the metal of the future. The beauty of aluminium compared to some of the competing materials is that it’s eternally recyclable. Once produced it’s challenging, because of its high energy requirements, but for the recycling of it, it requires a fraction of the energy – only 5%. The way I see it, if we do our sorting properly, the aluminium which we are producing today will still around providing our competition in 20, 30, 40 years’ time. It means that this will be a material that once produced won’t perish, provided we do proper sorting and capture on all of it. I think once that realisation sinks in, its uses will be even more reinforced.

We already have a lot of uses of aluminium; in transportation, construction, packaging and medicine. However, it needs to sink in because people outside the industry don’t appreciate that aluminium doesn’t rust like steel, it’s significantly easier and energy efficient to recycle compared to a material like fibreglass, used a lot in transportation. Let’s take the example of the Dreamliner. (Boeing 787) It’s made out of fibreglass materials, but they are extremely difficult to work with, far more expensive and I don’t think it’s even recyclable. So yes, aluminium has got a significant amount of uses.

I think consumers will be attracted towards low carbon aluminium. When it comes to our own material, the CelestiAL aluminium, it helped BMW reduce almost 200,000 tonnes of CO2 from its end product.

The CelestiAL aluminium helped BMW reduce almost 200,000 tonnes of CO2 from its end product. shutterstock_584292124

TS: You mentioned cost – a common roadblock for manufacturers, so how expensive is low carbon aluminium?

SA: Primary aluminium has got high barriers of entry because just to make a plant, the upfront requirements are quite high. When you come on to the routine production on a day-by-day basis, I think all the different materials have found their equilibrium.

Let’s take the example of EGA. We came into existence over 40 years ago, and we purchase our own captive power plant. When a customer wants you to provide them with low carbon metal then there is an additional cost that we have to incur in producing low carbon, because we have to engage with the owners of the solar parks. (based in the UAE) There is a cost involved in producing a low carbon metal compared to what has been the status quo.

A Boeing 787 is made of fibreglass materials. Harder to use anf more expensive than aluminuim shutterstock_1297831789
A Boeing 787 is made of fibreglass materials. Harder to use and more expensive than aluminium

This is an important and quite a sensitive area to look at because at the end of the day, we as a consumer and as inhabitants of the planet need to understand what’s important. In the future I think there will always be metal coming from different plants and countries, which are not going to put ESG as a top priority. We however, are going to put this as a priority, and within that ecosystem, low carbon metal is what will be produced. But it is more expensive to produce and customers will have to look at paying a premium for it.

TS: With that in mind, what has the uptake been like?

SA: It’s been phenomenal!  We can’t produce what the customers are asking for – we’re just not there yet and I think most of our peers aren’t there yet. There is a huge demand.

TS: What can other manufacturers take from the successful examples set by companies such as BMW?

SA: There are a number of customers like BMW, Audi, Nespresso, Apple – they’re all part of Aluminium Stewardship Initiative (ASI). We have this common language between the producers, the NGOs which are involved with us and the end users. What ASI also does is they appoint independent auditors. These are non ASI members and are trained on what to look for. So, this brings in a lot of standardisation.

In fact, I would really encourage readers to go to the ASI website, and you will see a world map. You can actually go into any country and see how many smelters, refineries and mines there are, and you can see what the key non-conformances are. Not only the members of the ASI, like ourselves, are open to independent auditors, we are also open that any non-conformances which can be found as public knowledge. This transparency and openness is key to the future of our metal, I believe.

TS: And finally, how can manufacturers take steps to ensure that they build eco-friendly relationships with suppliers?

SA: We are coordinating with other big companies – we have some specific challenges in the Gulf area and we want to develop with some big organisations in the UAE to help train our suppliers, especially the local suppliers, with respect to ESG elements.

I think this will require the big boys – you cannot ask a small manufacturing company to do this. As giants of industries, be it in steel, aluminium, copper – they have to get together and help the smaller guys with clarity on ESG matters by being very honest and frank with them. They need to make it clear, if you can’t pull up your socks on the ESG front, then we really don’t have a future together.

They should be trying to educate, develop and encourage them, be transparent with them and tell them what’s coming in the next five to 10 years, so they can be ready. I think that’s what the big guys and big industries should be doing.

Images courtesy of EGA and Shutterstock

Our editorial team have had their say on this interview in the latest edition of The Manufacturer Podcast.