Aluminium industry's climate commitment: an important step forward on a long road ahead

 Pernelle Nunez reflects on the commitments made by IAI members to transparency on climate change and their efforts to contribute to a sustainable future.

As the world grapples with the urgent need to address climate change, every industry is facing increasing pressure to reduce greenhouse gas emissions. The aluminium sector is no exception. As Deputy Secretary General and Director of Sustainability of the International Aluminium Institute (IAI), I've had a front-row seat to the industry's efforts to tackle this challenge head-on.

The IAI’s current initiative, the Aluminium Industry Greenhouse Gas Initiative, launched at COP28 in Dubai, marks a significant step forward. It commits to transparently tracking and publicly reporting the ambition and progress of all our member companies in greenhouse gas reduction.

In addition to reporting on all members, 13 member companies have also committed to reporting using the IAI’s recommendations as part of the initiative. These companies represent 250 million tonnes of greenhouse gas emissions and with this promising start it should bring consistency to GHG reporting across major players in the sector.

Current Emissions Data: Transparency and Areas for Improvement

Our Aluminium Industry Greenhouse Gas Initiative has provided valuable insights into the sector's emissions reporting and target-setting practices. The data collected demonstrates a strong commitment to transparency across the industry, with 96% of our member companies disclosing their Scope 1 and 2 emissions, which cover direct emissions and those from purchased energy.

However, we've identified an opportunity to improve Scope 3 emissions disclosure, which covers all indirect emissions in a company's value chain. Currently, 68% of our member companies are reporting on these emissions. This area presents a chance for our industry to engage more deeply across the entire value chain, fostering collaboration with suppliers and customers to drive broader emissions reductions.

The initiative has also revealed encouraging trends in target-setting across the industry. Many companies are setting ambitious interim targets for 2030, with a focus on significant reductions in Scope 1 and 2 emissions. The most common targets we're seeing are around 50% reduction by 2030, with some companies aiming for 30% reductions. Looking further ahead, we're seeing a clear industry-wide movement towards net zero or net neutrality goals by 2050, aligning with national and international climate objectives, including the Paris Agreement.

These commitments represent important steps forward, demonstrating our industry's willingness to set targets, be transparent, and report on progress. By bringing all this information together under the initiative's umbrella, we're providing external stakeholders with a comprehensive snapshot of our industry's direction and maturity in emissions reporting and reduction efforts.

Perhaps even more important than the public targets already set by companies is the dialogue that the initiative is encouraging. In some instances, companies without existing long term and interim targets, are being incentivised to have this discussion, decide on future goals and targets, and publish them. With this public disclosure comes a degree of accountability and commitment to deliver on those goals. This is something that the sector is shifting increasingly towards. With many in the sector already articulating clear interim and long-term goals, the next important step is taking action to meet them.

Whilst we're encouraged by this progress, we recognise that more work lies ahead. The Intergovernmental Panel on Climate Change (IPCC) has emphasised the need to reach net zero CO2 emissions globally by 2050 to limit global warming to 1.5°C. This ambitious goal requires unprecedented transitions across all sectors, including ours.

Moving forward, our initiative will focus on:

- Supporting comprehensive and consistent emissions reporting across all scopes

- Encouraging  companies in setting and achieving ambitious reduction targets,

- Facilitating industry-wide collaboration and knowledge sharing to accelerate the roll out and implementation of key decarbonisation technologies

- Tracking and reporting on our collective progress in reducing sector emissions

By maintaining this collective approach, we aim to drive continuous transparency, track real progress on emissions reduction, and ensure aluminium remains a material of choice in end use markets as an enabler of sustainable solutions.

Positive Trends and the Path Forward

The challenge before us is clear. Aluminium is a key enabler to reduce emissions in other sectors – automotive, transport, building & construction, and food & drink packaging, so we need to drastically reduce our emissions while meeting the growing global demand for aluminium. IAI data for 2022 shows we are already making a difference as, for the first time, total greenhouse gas emissions from the global aluminium sector did not grow, even though aluminium production grew by 3.9% (IAI data since 2019).

This positive news doesn’t mean we can sit back – if anything it demonstrates the scale of the challenge still ahead and we need to use it as a motivator to push on and see even greater reduction in emissions. The industry is still a long way off global climate goals. Aligning with these will require significant investments in new technologies across all regions (estimated at $1tn), including a necessary shift towards renewable energy sources for aluminium smelting. The longer it takes to scale up, roll out and implement key technologies, the harder the challenge becomes, and the more the industry’s carbon budget to 2050 is used up; the urgency of reducing emissions must continue to be at the fore of transition planning.

Our Aluminium Industry Greenhouse Gas Initiative is designed to foster ambition and track progress transparently. But it's just the beginning. We need all companies in our sector to be transparent and consistent in their reporting, set ambitious targets for all emissions, and engage with stakeholders who are critical to furthering decarbonisation ambitions. The role of other actors in the value chain cannot be overstated in determining the success of aluminium industry decarbonisation and through this transparent reporting of the current state of play, we hope it acts as a clear signal that the aluminium industry is committed and ready to act.

Moreover, we're already seeing encouraging signs of concrete action beyond target-setting. Our member companies are increasingly investing in cutting-edge research and development, implementing industry-leading best practices, and fostering innovative collaborations across the value chain to drive emissions reductions.

These proactive steps demonstrate our industry's commitment to turning ambitious goals into tangible results, paving the way for a cleaner, more sustainable future for aluminium production.

Industry Collaboration: Turning Goals into Action

The road ahead is challenging, but it is aligned to the challenges that face broader society. The climate crisis demands accelerated action from all; it demands a fundamental shift from business as usual and it involves us facing some uncomfortable truths. The aluminium industry GHG initiative will not be a silver bullet that accelerates sector decarbonisation on its own, but it is a good starting point for actors across the value chain to engage on climate targets, encourage difficult discussions, and foster ambition and action towards shared goals. As we move forward, we must continually raise our ambitions, push for faster progress, and hold ourselves accountable.

According to the Mission Possible Partnership's Global Project Tracker, the aluminium industry is well-positioned compared to other sectors in its progress towards decarbonisation. This gives us a strong foundation to build upon, but we must not become complacent.

The aluminium industry has many features that position it well to be a leader in industrial decarbonisation. It is now time to work closely with the value chain to ensure the right environment for accelerating decarbonisation is in place.Through continued collaboration, innovation, and commitment to transparency, we can pave the way for a more sustainable aluminium industry and a more sustainable future.

Pernelle Nunez is the Deputy Secretary General and Director of Sustainability of the International Aluminium Institute (IAI)