Aluminum to benefit from infrastructure bill

Following months of negotiation, Congress passed the bipartisan Infrastructure Investment and Jobs Act (IIJA) Nov. 5. The bill allocates $1 trillion, including $550 billion in addition to the funds Congress already had planned to allocate for infrastructure over the next eight years, to help rebuild roads, bridges and rail; expand access to clean drinking water; ensure access to high-speed internet; reduce the impacts of the climate crisis; and advance environmental justice, the Biden administration says.

The IIJA will invest $7.5 billion to build a national network of electric vehicle (EV) chargers within communities and along highway corridors to facilitate long-distance travel.

The bill also allocates $65 billion to upgrade U.S. power infrastructure, including the largest investment in clean energy transmission and the grid in American history. Thousands of miles of new transmission lines will be built to facilitate the expansion of renewables and clean energy, while new programs will be funded to support the development, demonstration and deployment of clean energy technologies to accelerate the transition to a zero-emission economy in the U.S.

This summer, the Aluminum Association sent a letter to Congress in support of the infrastructure framework that had been introduced in late June.

In that letter, Tom Dobbins, who was then CEO of the Washington-based Aluminum Association, writes, “The U.S. aluminum industry and its leaders know that this once-in-a-generation infrastructure investment will make our nation more resilient, our climate cleaner and our economy more competitive. As one of only eight critical mineral commodities recognized by the federal government as essential to all sectors of the U.S. economy, this bipartisan investment will depend on aluminum.”

The association has noted that the legislation addresses several of its infrastructure priorities, such as vehicle electrification, bridge rehabilitation, electric grid modernization, public transportation building projects and recycling infrastructure.

Recycling Today spoke with Mike Stier, vice president of finance and strategy for Oslo-based Norsk Hydro’s North American extrusion business, about how aluminum demand could benefit from U.S. infrastructure investments. Stier is based out of Phoenix.

Multiple opportunities

Stier says the passage of the legislation “is exciting because aluminum hits a lot of different segments of the bill itself. Bridges, rail, electrification, the grid updates, you name it, there are opportunities for aluminum throughout there.”

He says the opportunities surrounding aluminum are direct—the metal will be use in the projects themselves—and indirect. In that second category are the shorter term investments in equipment, such trucks and trailers, machinery and scaffolding, that will be needed to gear up for this level of national investment, Stier says.

In terms of bridges and roads, he says signage and guarding provide “tremendous opportunities” for aluminum.

Stier says the metal also will benefit from the megatrend of electrification, particularly as it relates to EVs and rail, as aluminum “is a uniquely qualified material around conductivity. You have both the electrical and thermal side of that that is of benefit.”

He says, “The bill really is good news for the industry. I think this will spur near-term demand gearing up for it, as well as likely over the course of several years as this rolls out and funding gets released throughout the whole U.S.

“We envision very strong demand in the aluminum extrusion industry for the next few years at least,” Stier continues. “And now you layer in this infrastructure bill on top, I think this really props up the out years even when you get out five, seven, 10 years, etc.”

Green energy and the grid

In the area of green energy and the electrical grid, Stier says he believes aluminum will benefit in a variety of ways given its ability to conduct heat and electricity. “There are a number of applications that come to mind that make sense.”

From a grid standpoint, Stier says aluminum’s conductivity makes it well-suited for high-power transmission, but the metal also will be used in controls, including the cases around electronic components and the heat sinks used in these applications.

In the green energy sector, he says the structure of solar panels is comprised predominantly of aluminum. While this is not a new application for the metal, Stier says more aluminum is likely to be used to construct panels as solar energy expands.

He points out another advantage of aluminum when it comes to green energy. “Just the fact that we are talking about renewables and green, if you will, the benefit of the recyclability of aluminum comes to play,” he says. “In a buyer’s mind, they likely favor renewable materials in how they are building these products. Aluminum is infinitely recyclable. It doesn’t lose its properties when it's recycled time after time. That is clearly a benefit that we have with the material.”

Electric vehicles

Aluminum likely will play an expanded role in EV production as it ramps up in the U.S. beyond auto sheet applications. Stier says there has been significant development to use aluminum in the chassis of EVs as well as in the component tree to support batteries and dissipate the heat that they generate.

Aluminum’s use in chassis applications reduces weight and improves crash characteristics, he says. “We engineer solutions that absorb the kinetic energy. We are able to in a very controlled way absorb that energy … so that it takes enough energy out of the impact to protect the passenger compartment.”

The rail sector

Stier says he expects to see a greater drive toward lightweighting in the rail sector and aluminum has a prominent role to play. “To me, anything that moves in a significant way, there is an advantage to using an aluminum product. It’s lightweight [and] you are able to carry more load because you don’t have the heavy weight associated with the materials of the cars. And the actual energy needed to move those vehicles, there is quite an advantage to using aluminum to reduce fuel consumption.”

He adds that the U.S. is behind Europe in using rail in urban areas and high-speed long-distance travel, though he says he thinks these applications “can pull on the value proposition of aluminum.”

While Stier is unable to provide market share numbers, he says, “Aluminum is significantly underutilized in rail at this point. I call that material white space. There is so much material white space there for us.”

Building and construction

New buildings will accompany the planned infrastructure investments as well, and Stier says aluminum will have a role to play in their construction, too. Aluminum can be used in window and door frames, curtain walls and conduits.

Recycling

As existing infrastructure gets torn out, the opportunity to recycle the aluminum used in these applications will be available to Hydro and other companies, he points out. Stier says this material will fit well into the company’s value stream. “At Hydro, we have 11 recycling plants in the U.S. We are investing in another, taking it to 12.”

He is referencing the company’s plans to build what it calls a “state-of-the-art aluminum recycling plant” that will produce aluminum extrusion ingot in Cassopolis, Michigan.

The planned facility in Cassopolis represents “a key step in [Hydro’s] ambition of doubling its recycling of postconsumer aluminum by 2025,” the company says. The aluminum produced will be used in automotive and other transportation applications and for building products.

Hydro also is exploring new ways to use obsolete aluminum scrap “directly within the primary production process” at its Norwegian smelters. The firm says its smelter in Høyanger, Norway, is serving as a pilot location for the project.

Stier says Hydro’s extrusion business uses material made from 75 percent recycled content currently. He adds that the company plans to increase its use of postconsumer, or obsolete, scrap going forward. “As we get more sophisticated with the different scrap streams, it requires better segregation of types of material. What will need to be developed over time is much more sophisticated capture, segregation and processing to fine-tune those scrap streams.”

Doing so will allow Hydro to further segregate aluminum alloys by type to ensure the company is optimizing their use, he adds.

Accessing this scrap will help Hydro meet the growing need for aluminum that will result from the investments in U.S. infrastructure.

“From an aluminum materials standpoint, there is significant strength in the years, potentially decade, to come,” Stier says.

He adds that he expects the aluminum extrusions market, which totaled 6 billion pounds in 2018, to surpass that level in the years to come thanks in part to the infrastructure investments in the U.S.