Demand is expected to grow for aluminum products over the next decade, coming from major industries such as automotive, construction, packaging and aerospace.

December, 2023- Challenges and opportunities frequently go hand in hand. The current circumstances and future goals of the aluminum industry are no different in that regard. Modern Metals spoke with Matt Meenan, vice president of external affairs, and Nadya Ally, sustainability director, at the Aluminum Association, to discuss the lay of the land.

“The last several years were challenging but also exciting,” Meenan says. For example, “We had three new aluminum rolling mills announced in 2022 and two of those are well under way— starting up in the next couple years. The last time we built one similar mill in the United States was 1980,” he notes.

“It is a generational shift” that drives new capacity builds. “There is a broad view that demand will grow over the decades. The U.S. is a deficit market. We use more primary metal than we have capacity. A large percentage of imports come from Canada,” followed by other sources. “As demand ticks up, we have to find more metal, and that means increased recycling,” Meenan says. “As an association, we promote new technologies for sorting and container deposit programs.

      Beverage cans are a big business for aluminum mills

We hope to unlock that potential.”

The industry in the United States and Canada experienced near-record demand in 2022, he says. In 2023, aluminum demand returned to an average seen over the previous 10 years. In general, however, “we think the trend line will improve. COVID created a lot of unprecedented events, and the economy is sorting out what that means. We are still grappling with the unknowns.”

Every three years, the association’s Aluminum Transportation Group commissions market research agency Ducker Carlisle to conduct a study based on interviews with automakers. One was released last April, which found “that we are looking for a net increase of 100 pounds of aluminum per vehicle from 2020 through 2030, for a total of 556 pounds,” driven by the demand for vehicles that are more environmentally sustainable, Meenan says.

CAPACITY BUILDUP

Several aluminum mills have expanded recently or are planning expansions, but given the projected trajectory of demand growth, will there be enough North American capacity to meet demand over the next decade? “There are two greenfield aluminum rolling mills that have shovels in the ground,” says Meenan. “One is Novelis’ Bay Minette, Alabama, plant and the second is Aluminum Dynamics in Columbia, Mississippi.” A third company, Norsk Hydro, began commissioning equipment at its greenfield recycling plant in Cassopolis, Michigan, during the third quarter and expected to produce its first extrusion ingots in November. Full operation is slated for the second quarter of 2024.

      Raw coils

These companies, Meenan says, “do see the value in aluminum’s potential. In terms of product mix, beverage can and auto are the two big markets” for the new capacity. “A lot will depend on market trends in 2025 and 2026, when all the new mills are online.”

NADYA ALLY, ALUMINUM ASSOCIATION

Ten years ago, he notes, “there was conversation about demand for beverage cans declining, in part because people were drinking less soda. That was the prevailing wisdom.” But for the past five years, the movement against single-use plastics has grown stronger, making way for aluminum. Aluminum packaging has gained penetration into the beverage industry and has additional growth potential.

Located in Quebec and financed by Rio Tinto, Alcoa and Apple, Elysis is working to create a carbon-free smelting process

EMISSION GOALS

There are efforts throughout the producer sector to reduce emissions over time, and for some to even achieve net-zero emissions. “There are two main themes,” according to Meenan. “One is development of emissions technologies, and the second is recyclable material.” On the development side, he cites the partnership among Alcoa, Rio Tinto, the Canadian and Quebec governments and Apple to create Elysis. Launched in 2018 at Saguenay–Lac- Saint-Jean, Québec, Elysis metallurgists and other technology professionals are “working on a way to make a carbon-free smelting process.” Aluminum comes from alumina and carbon is a byproduct. Instead, the byproduct of the Elysis process would be oxygen. Similarly, Oslo, Norway-based Hydro is developing what it calls HalZero technology, which is based on converting alumina to aluminum chloride prior to electrolysis, in a process where chlorine and carbon are kept in a closed loop and where the only direct emission during the electrolysis process is oxygen.

NADYA ALLY, ALUMINUM ASSOCIATION 

“Both are in the trial stages,” Meenan says. Hydro and Elysis hope “to achieve commercial scale by 2030,” as reported in their own sustainability reports. “The second best way is recycling secondary aluminum, which is 95 percent less energy intensive than making new aluminum.” (More on that later.)

A worker sorts through post-consumer scrap at Hydro.

FUNDING PROSPECTS

Readers might wonder whether there are government incentives to help aluminum companies become greener. Nadya Ally says yes, citing one example. “The U.S. Environmental Protection Agency has a grant program application due Jan. 8, 2024, for reducing embodied greenhouse gas emissions for building and construction materials and products. EPA has about $100 million earmarked for environmental product declaration (EPD) mandates to increase the use of construction materials with lower embodied carbon.

“EPDs are the environmental equivalent of nutrition labels for foods,” she explains. “The goal is to support businesses, nonprofits, states and indigenous tribes that manufacture construction materials and products.” She calls this a big deal “because consumers are demanding more transparency about how the products they buy affect the environment. EPDs help them to make better choices.

“I am hoping that several of our member companies are going to apply for it, and are eligible,” says Ally. “We have committees in our association that are making members aware of these opportunities.” A separate U.S. body, the Treasury Department, offers tax credits for clean energy, including aluminum. “One will come out at the end of this year: it supports expanded manufacturing of highpurity aluminum for critical materials.” Through the Qualifying Advanced Energy Project Credit program under section 48C of the Internal Revenue Code, “money is available to install technology to reduce emissions by 20 percent. It can be spent on renewable energy,” Ally says.

EPA has $100 million earmarked for environmental product declaration mandates to boost the use of low-carbon construction materials.

Incentives are also coming from the bipartisan Infrastructure Investment and Jobs Act of 2021. “We are supportive of the infrastructure spending. The Department of Energy has about $6 billion in grants dedicated to low-emission production facilities,” says Ally. “We are letting members know that money is available, and we encourage them to find ways to reduce emissions, and get funding for their projects.” She notes that 17 aluminum-specific papers have already been submitted to the DOE.

ROADMAP

“Consumers are asking for more transparency” regarding the products they buy and although “aluminum is already a material of choice,” it requires energy, Ally says. A third party is helping the association and its members collect data to create “a theoretical roadmap” to illustrate how producing more aluminum in North America (the U.S. and Canada) can reduce global greenhouse gas emissions. “Due to hydroelectricity and other systems, there will be a reduction in CO2,” she predicts. “We are looking at the availability of scrap, how much primary aluminum we have in the U.S. and Canada that is low carbon, so we can answer those types of questions.” The study is slated for completion in 2024, she notes. On the recycling side of the emissions equation, the association is making an effort to promote recycling refund programs on aluminum cans, also known as deposit return systems. The practice was prevalent in several states after the U.S. Congress passed the National Environmental Policy Act in 1970, which created the EPA, among other acts. Only 10 states and Guam currently have these systems in place. “The concept is you buy the product and you rent the container,” says Meenan. “The consumer spends 5 or 10 cents more for the can and gets their deposit back when the empty can is returned. Recycling of aluminum cans occurs at a 46 percent rate nationally but can rise to above 80 percent in states that offer a refund,” he notes.

MATT MEENAN, ALUMINUM ASSOCIATION 

LIFE CYCLE ANALYSIS

“We have long looked at life cycle of aluminum as a material. You have to observe the carbon footprint from extraction to production to recycling and end of life,” Ally says. In October, the association worked with John Beath Environmental to publish “a meta analysis, looking at 15 life cycle assessments in the carbonated beverage can space, comparing glass, PET and aluminum. We analyzed all the available information, the assumptions, how the studies were put together.” Basically, the aluminum beverage can and PET bottles significantly outperform glass in terms of global warming potential (GWP). When it comes to the GWP of aluminum cans and PET bottles, both containers have a similar performance. “However, aluminum cans have numerous advantages because the material goes back into the same product over and over again,” she explains. Adds Meenan, “closed-loop recycling is happening more and more. Seventy-five percent of all aluminum ever created is in the system today, being used as a car part, aerospace part or beverage can.”

The Aluminum Association, 703/358-2960, http://aluminum.org/