Fully transparent

Traditional single-location secondary aluminum and aluminum alloys producers have melted scrap because it was what they were equipped to do. Without affordable access to capital-intensive refined alumina or primary aluminum, they melted scrap in a comparatively more modest process.

Alloys producers have long preferred that larger, traditionally primary firms maintain little involvement in the scrap market, but competition for scrap feedstock seems poised to grow.

Sustainability and decarbonization targets in numerous industry sectors, including automotive and building products, have caused multinational aluminum producers and the London Metal Exchange (LME) to give recycling a larger presence in overall strategies.

The LME uses the word “passport” (implying the ability to travel) in reference to recycled content in branded aluminum alloys and other metals traded globally. Its LMEpassport business unit includes a continuously updated list of sustainability disclosures that brands can make to potential buyers, with recycled content included among those disclosures.

“LMEpassport offers metal brand producers the opportunity to voluntarily input other value-add information relating to sustainability,” Singapore-based LME staff member Joe Vu told Recycling Today earlier this year.

As of early August, several dozen aluminum alloy production facility operators listed their products as meeting the LMEpassport “Environmental-Recycled Content” theme. To make this disclosure, metals producers must meet certain audited LME Responsible Source requirements.

Aluminum alloys producers that have found the disclosure desirable include locations of Cleveland-based Real Alloy, which has facilities in North America, plus its former melt shops now operated by Germany-based Speira; China-based Ye Chiu Metal Smelting, which also produces alloys in Malaysia; Germany’s Oetinger Aluminium; and several North American alloys makers, including Allied Metals, Owl’s Head Alloys, Spectro Alloys Corp. and TST Inc.

Transparency benefits the bottom line

Is more recycling—and more transparent recycling—beneficial to the bottom lines of scrap-melting alloys producers? Texas-based global aluminum industry consulting firm Harbor Aluminum appears convinced.

“In response to being put under the climate microscope, primary aluminum producers worldwide are adopting new environmentally friendly production processes, including shifting toward the use of renewable energy and investing in new green smelting technologies [like inert anode] or even studying carbon capture and storage solutions to accelerate their decarbonization efforts,” the company writes.

“However, across the entire aluminum industry, investing in recycling currently has become the preferred initiative to reduced carbon emissions in the production process.”

Beyond the LME, when it comes to certifying scrap content, aluminum producers also have helped fund and put in place the Australia-based Aluminium Stewardship Initiative (ASI).

The organization lists circularity as one of four sustainability priorities, along with climate change, human rights and “nature positive.”

“With its high-value, diverse-use applications and recyclable properties, aluminum is a material expected to be critical for supporting transitions to a more circular economy,” ASI says.

Norway-based Norsk Hydro ASA, which also has numerous scrap-fed melt shops in the United States, is among secondary aluminum producers that have gravitated toward ASI certification.

The Extrusion North America business unit of Hydro ASA has attained ASI Performance Standard V2 certification at 23 of its scrap melt shop sites in the United States and Canada.

“We have seen increased demand from our customers in North America for greener products and greater transparency.” – Jerrod Hoeft, Hydro Extrusion North America

When announcing its total number of ASI facility certifications, Hydro also said ASI’s system is “the only comprehensive, voluntary sustainability standard initiative for the aluminum value chain,” and pointed to its third-party auditing system.

“We have seen increased demand from our customers in North America for greener products and greater transparency,” says Jerrod Hoeft of Hydro Extrusion North America.

When aluminum producer Novelis, headquartered in Atlanta, announced multiple ASI certifications two years ago, CEO Steve Fisher said, “These certifications establish Novelis as a supplier of choice and a partner that is improving sustainability throughout the value chain.”

As with the LMEpassport disclosures, how or whether ASI certification is accruing to the bottom line might not be immediately apparent and could depend on emerging carbon “border taxes” being formulated in Europe and the U.S.

In the European Union, aluminum, along with steel, is one of six carbon border tax focuses in an emerging carbon border adjustment mechanism (CBAM) system designed to force global metals producers to accelerate efforts to reduce their carbon footprints.

The U.S. is not as far along in its carbon border tax formulation, though as of June, the U.S. Office of the Trade Representative had begun its investigation to assess the greenhouse gas emissions intensity of steel and aluminum produced in the U.S.

Aluminum trade associations representing the regions recently authored a joint letter advocating their governments work together on a carbon border tax and similar measures.

In all likelihood, after such systems are in place, producers of recycled-content aluminum—whether or not they receive a premium price for what they make—will need to attest to their use of energy- and resource-saving scrap melting methods merely to retain full access to the global market.

The author is senior editor with the Recycling Today Media Group and can be reached at btaylor@gie.net.