A(nother) Disappointing Global Climate Summit, but ASI’s Climate Work Continues

27 November 2024

The annual COP climate negotiations, this year held in Azerbaijan, have ended, perhaps not unexpectedly, with lukewarm outcomes.

Governments (Parties to the UN Framework Convention on Climate Change) agreed to:

1. $300 billion in grants and loans for the developing world to promote decarbonisation, with no guarantee of delivery; $1 trillion further promised by 2035 on behalf of private investors over which governments have limited control. (The cost of decarbonisation of the aluminium sector alone is projected to be US$1 trillion).
2. New rules for the international carbon market – 9 years in the making and with technical details still to be determined. However these rules do recognise the fact that abatement of emissions within national boundaries (or in sectoral value chains) must be augmented by investment in emissions removals and reductions (including nature-based solutions), if global climate goals are to have a chance.  In future, and in harmony with other net zero standards development, we can expect that ASI and its Members may have to look beyond abatement alone to begin to explore mitigation options outside the aluminium value chain as well as within the sectoral boundary.
3. No reiteration of the COP28 commitment to transition away from fossil fuels, this being the single largest source of the aluminium sector’s footprint.

The process could be seen to be failing (with open calls for reform) as it stumbles into its 30^th iteration against a backdrop of de-globalisation, national self-interest and manifestation of climate impacts.

However, change is happening, albeit not at the rate and scale required.  Projected temperature rise is decreasing as national and sectoral targets begin to take shape.  The aluminium sector, reflecting this fact, saw for the first time a fall in total emissions in 2022, despite growth in production.  Even so, limiting global temperature change to under 1.5 degrees above pre-industrial levels is looking increasingly unlikely.

ASI’s work on climate in 2024

A year ago, ASI finalised its Entity-level 1.5C-aligned GHG Pathways Method for all aluminium-producing and using companies.

Version 3 of the ASI Performance Standard, published in 2022, calls for certifying ASI Entities (no matter where they sit on the aluminium value chain) to “establish a GHG Emissions Reduction Plan and ensure a GHG Emissions Reduction Pathway consistent with a 1.5 degree warming scenario.”

Ultimately, if each Entity-level Pathway is followed, the outcome should be that the sector’s carbon emissions budget (currently around 15 Gt CO2e) is not exceeded.  With the aluminium industry emitting over 1 Gt CO2e every year, this is a huge undertaking that requires action at speed and scale, even as demand for aluminium is increasing.

The ASI Method is based on IAI sector-wide slopes, themselves broadly aligned with the International Energy Agency (IEA) Net Zero Emissions Scenario (NZE).

IEA is holding a series of webinars in December on its recent Energy Technology Perspectives 2024 report.  Follow the link ETP-2024 -Authors’ insights webinars to explore the topics and register for the webinars (free and open to all), the following in particular of relevance to the aluminium sector.

• Near-zero emission materials production and trade
  6 December 2024, 15:00 – 16:00 (CET)

What are the barriers to 1.5C alignment?

The main structural issues creating barriers to 1.5C alignment for aluminium, particularly primary production, are:

• limited access to renewable energy in the short to medium term
• limited access to – and limited availability of – quality scrap
• limited access to capital and/or commercial return on investment in decarbonising technologies
• immaturity of such technologies for deployment at scale.

While ASI Certification is not a primary driver of Entities’ Pathways performance, it has an important role to play in increasing the transparency and verification of targets and performance data.  By requiring use of the ASI Method, Certification also promotes standardised approaches to Pathway articulation.

What are the key drivers for change?

Many of the performance drivers for climate action relate to cost and finance, including:

• long term and competitively priced (potentially subsidised) low carbon electricity
• a market for low-carbon aluminium
• the mobilisation of green and sustainable financing across the entire value chain to support these.

Other supporting enablers for change include continued power decarbonisation rollout through grids, access to quality scrap metal and ongoing R&D for new technologies.

The challenge

Mitigation-led 1.5C alignment is going to be extremely difficult to achieve, either in- or ex-sector.

The aluminium sector, in particular primary production, where the majority of the industry’s emissions are involved, is structurally limited in its ability to reduce emissions at scale.  ASI is actively working on plans to reconcile the structural inability of Entities to meet GHG emissions reductions in line with a 1.5 degree Pathway and their continued certification against v3 of the Performance Standard.

Even with such structural limitations, however, the sector will need to set (and ASI will continue to drive towards) ambitious targets, with plans for delivery, to achieve continuous emissions reduction wherever possible and to be transparent on its footprint.

ASI remains committed to a 1.5ºC aligned aluminium sector and a hope that its achievement is possible.

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