Hydro, one of the leading aluminium manufacturers globally, predicts a sharp rise in the demand for its low-carbon aluminium in the coming years. The U.S. market, in particular, shows a growing inclination towards recycled material.
Low-carbon aluminium is becoming increasingly important in the energy transition, particularly in electric vehicles (EVs). Aluminium lightens EVs, compensating for the weight of components such as batteries.
Traditional primary aluminium production, which relies heavily on electricity, is carbon-intensive. Consequently, environmentally-conscious consumers are pivoting towards recycled and low-carbon alternatives. Hydro’s version of this material incorporates recycled elements and is produced using hydroelectric power.
Hilde Merete Aasheim, Hydro’s Chief Executive, remarked, “Growth in demand for low-carbon aluminium far exceeds expectations for average consumption.” The firm anticipates that the annual demand for its eco-friendly aluminium will surge by 20% until 2030. In contrast, the primary aluminium market is expected to grow by a mere 3% annually during the same timeframe.
While the company remained tight-lipped about the pricing of its low-carbon aluminium, it did indicate that products with lower CO2 content could fetch higher prices.
Carbon emissions from aluminium production are inconsistent worldwide. For instance, manufacturing one ton of aluminium in China can produce up to 20 metric tons of carbon due to the coal-dependent power generation. In Europe, it’s less than seven metric tons. Hydro’s primary aluminium, for comparison, emits just four metric tons. Recycled aluminium, on the other hand, consumes 95% less energy than its primary counterpart.
In the previous year, Hydro secured contracts to supply its low-carbon aluminium to major European car manufacturers, including Porsche and Mercedes-Benz.
Despite aluminium’s critical role in the packaging, construction industries, and its recognition as a critical mineral by the U.S. and the EU, demand remains robust. This is true even with escalating raw material costs and a slowdown in European construction. Aasheim commented on the sector’s appetite for recycled aluminium products, calling it “remarkable.”
This year, the global demand for primary aluminium is projected to hover around 70 million metric tons.
Furthermore, Hydro is amplifying its recycling endeavors in the U.S., thanks in part to the U.S. Inflation Reduction Act (IRA). This legislation emphasizes enhancing the domestic supply of pivotal minerals for the energy transition.