Climate COP 26 outcomes and ASI alignment
While COP26 focused on Parties, ASI’s focus is on non-state actors in the aluminium value chain. Find out how ASI actions are supporting a 1.5C pathway.
14 December 2021
Data and Research Insights, December 2021
The Climate COP26 event in Glasgow, Scotland saw a renewed commitment of almost 200 governments (Parties) to pursue efforts to limit global average temperature rise to 1.5oC above pre-industrial levels, a commitment that is shared by the ASI Standards Committee when developing our Standards.
While the decisions and resolutions from COP26 were principally about Parties, ASI’s focus, while not blind to the actions of Parties, is on non-state actors – industrial producers.
We are a standards setting and certification body for aluminium producing and consuming Entities, with a multi-stakeholder approach and, importantly, a broad sustainability perspective.
The aluminium sector currently emits over one billion tonnes of greenhouse gases (as CO2e), around 2% of global anthropogenic emissions. According to the International Aluminium Institute (IAI), under a 1.5oC aligned pathway, total sectoral emissions will need to be 50 million tonnes by 2050, with electricity (the highest contributor to aluminium emissions) near zero by that time.
Let’s look at some of the upcoming changes to ASI’s Standards through the ongoing revision process, the ways in which these align with COP26 outcomes and explore whether (and how) ASI can help to drive change.
COP26 outcome: Defined pathways and (5 year) time-frames
ASI action: 1.5 oC pathways for all certifying Entities
Importantly, the draft V3 ASI Performance Standard introduces a new criterion that requires all certifying Entities, wherever they sit on the value chain, to establish a GHG Emissions Reduction Plan and ensure a GHG Emissions Reduction Pathway consistent with a 1.5oC warming scenario, using an ASI endorsed methodology.
Such pathways will need to include intermediate targets with 5-year intervals, addressing all direct and indirect emissions, developed using a science-based approach and with public disclosure.
For many downstream Entities, with a large proportion of emissions embedded in the metal that they transform (Scope 3, category 1), this will entail procurement strategies that favour low carbon aluminium (primary and recycled). But not only that – their own processes will need decarbonising through increased electrification and use of low carbon energy.
For primary producers, 1.5oC pathways will mean energy transition, increased grid connection, the deployment of novel technologies, hydrogen and carbon capture, utilisation and storage (CCUS).
COP26 outcome: “Science Based Targets”
ASI action: 2022 project to revise aluminium SDA
The “ASI endorsed methodology” to turn a sectoral 1.5oC pathway into an Entity-specific plan is not yet available, but ASI, in conjunction with IAI, are working towards revision of the Science Based Targets initiative (SBTi) Sectoral Decarbonisation Approach (SDA) method for aluminium. By the end of 2022, it is hoped that such a method will be available. That shouldn’t stop action now, however – no matter what kind of Entity, the path to below 1.5 oC is challenging but the end point is clear – a more than 95% reduction in emissions intensity by 2050.
COP26 outcome: Accountability & transparency
ASI action: Public disclosure and supply chain communication
Throughout the draft V3 Performance Standard you will find criteria driving increased public disclosure of sustainability information. For greenhouse gases and energy, drawing on recommendations from a recent ASI-commissioned report, Guidance will be updated, with (independently verified) disclosure expanded from emissions inventory data to include forward looking pathways, targets and calculation methods employed.
Critically, ASI is working with partners (such as CRU, which recently added global rolling mill asset data to the primary production facilities in its Emissions Analysis Tool) to ensure harmonization in calculation methods, common scopes for disclosed emissions and that greenhouse gas data is not the sole focus. In CRU’s case, this latter is illustrated by the ASI certification data layer that now sits on the database. ASI is also encouraged by the recent addition of Copper Mark and Responsible Steel certifications to the dataset – following ASI’s leadership earlier this year.
In addition to upcoming changes to the Performance Standard, Version 2 of the Chain of Custody Standard introduces voluntary product carbon footprint disclosure as part of sustainability information within CoC Documents (which accompany CoC Material). All Entities, wherever they sit on the value chain are encouraged to include cradle to gate emissions data in their CoC Documentation, embodying all emissions upstream of the product. Such disclosures allow customers to understand the greenhouse gas impact of the CoC Material they purchase and transform (and include it within their own Scope 3, category 1 inventory) as well as to compare the footprints of purchased products like-for-like.
COP26 outcome: “Phase out” of coal
ASI action: Smelter thresholds excluding new coal and with pathways for existing coal
The criterion for smelter emissions intensity has also been revised and expanded to include scope 1, scope 2 and scope 3 (for categories 1, 3 and 4) emissions (Mine to Metal), measured at the smelter casthouse. The current V2 of the Performance Standard covers only scopes 1 and 2. The threshold value for the V3 Standard, while still draft, is set at 11 t CO2e/t Al for newly-started (post 2020) smelters, with those operating before 2020 required to reduce emissions to below 13 t/t by 2025 and 11 t/t by 2030.
It is clear that such thresholds DO provide coal-fired Entities eligibility to become certified.
However, the Performance Standard (V3) also requires such Entities to have decarbonisation plans that are 1.5oC pathway aligned – in the short term that means reductions of the order of up to 50% by 2030, but over 95% by 2050.
Indeed, even the lowest emitters today (c. 4.0 t/t Mine to Metal) will need to reduce by an order of magnitude by 2050.
ASI certified Entities across the value chain are currently responsible for around 10% of global aluminium-sector emissions, predominantly from the smelting process.
Non-ASI smelters with a performance currently under 11 t/t Mine to Metal (scopes 1, 2 and 3, categories 1, 3 and 4) represent a further 5%.
With a singular focus on 2021 performance this is the (limited) opportunity for ASI to effect change: 15% of the sector’s 1.1 billion tonnes of CO2e emissions.
However, there is an even greater opportunity for change by improving the performance of currently high emitting processes.
Pre-2020 operating smelters using coal-fired energy represent over 70% of sector emissions, including upstream processes (source: CRU Emissions Analysis Tool). The balance (15%) is from downstream processes and primary production with power mixes that include a significant proportion of fossil fuels.
ASI recognises that driving significant change to 2050 means phasing out coal (and decarbonising other energy carriers) and sees its role as promoting that transition, not only differentiating 2020 performance, which predominantly reflects legacy access to energy sources.
COP26 outcome: Climate aligned finance
ASI action: Engagement with Center for Climate-Aligned Finance
Financial sector interest in ASI (and other sustainability standards schemes) is arguably the fastest growing of any of our stakeholders. Global, economy-wide net zero by 2050 will require trillions of dollars in capital investment. Aluminium, as a material that will be in increasing demand to deliver an energy, resource efficiency and behavioural transition, is high on the list of investment needs. ASI is engaging with this sector within a number of fora (but in particular through the Rocky Mountain Institute-managed Center for Climate-Aligned Finance), to ensure that the harmonized approaches and 1.5oC aligned pathways referenced above are embedded in the rules under which capital is invested but also to champion the broad suite of sustainability issues that ASI has built into its standards. Decarbonised energy, novel technologies, increased recycling – all of these present ESG risks that need to be managed as a whole, not ignored for a singular focus on emissions reduction.
COP26 outcome: Rules to prevent double counting
ASI action: Reference to SBTi Net Zero Standard
ASI’s forthcoming revised smelter emissions reduction targets are targets for value chain emissions abatement and will need (like all Entity pathways) to be backed up by emissions abatement plans (through, for instance, low carbon procurement, fuel switching or novel technology deployment).
Smelter thresholds are abatement only but all Entity GHG Emission reduction Pathways, in addition to abatement plans, may include beyond value chain mitigation – contributing to reduction in emissions at the broader systems level. Examples and approaches to beyond value chain mitigation are outlined by the Science Based Targets Initiative, as part of its recently released Net-Zero Standard. Further work in this dynamic space is ongoing and ASI is actively engaged in this discussion as well as referencing SBTi Beyond Value Chain Mitigation resources in Guidance.
Such work is important, to avoid double counting of emissions reductions and to link up corporate net zero claims with a true, science-based, global economy-wide 2050 net zero pathway (the route to limiting temperature rise to 1.5oC).
COP26 outcome: Focus on adaptation
ASI action: 2022 project with IAI on health
Alongside GHG mitigation and financing, adaptation of societies to a changing climate is a pillar of climate change work globally – accelerated in recent months, as the effects of a changing climate are felt more keenly, particularly by vulnerable communities, regions and individuals.
In 2022, ASI will partner with IAI on a project to develop an asset-based tool for assessing and managing site-level climate-related health and safety risks. The tool will be applicable to both occupational and local community populations and focus in particular on (primary) aluminium assets and locations.
COP26 outcome: Sectoral partnerships
ASI action: Active in Mission Possible Platform
A theme of the communications from Glasgow, by both Parties and other participants, is that climate action at the scale and speed required to achieve net zero by mid century is only possible through co-operative action and partnerships. This is clear for the aluminium sector, which has been identified as “hard to abate” and on which work is now focused by the Mission Possible Partnership.
ASI has been involved with the Partnership’s Aluminium for Climate Initiative since its inception, with an objective to ensure harmonisation between the Initiative and all the other activities referenced above, to encourage the use of common methods and standards and to use ASI’s Standards to drive change along a 1.5oC Pathway.
COP26 outcome: Nature-based solutions
ASI action: Nature-positive as one of the pillars of ASI’s new strategy
The broad suite of sustainability issues covered by ASI’s Standards reflects the fact that we have always been more than a greenhouse gas-focused initiative. Climate change is a critical issue, perhaps the most critical of our time, but it is not the only risk to be addressed. ASI recognises that low carbon and “green” are not the same and that neither label fully captures the many and varied impacts that aluminium production and consumption brings – today and in the future.
ASI’s forthcoming revised strategy has nature-positive action as one of its four sustainability priorities, recognising that functioning ecosystems are the context for all life human wellbeing and socio-economic development. It is not enough to do what we have been doing for the last two decades, with a bit more efficiency. Nor is it enough to expect that small changes to a small subset of the sector will bring about the scale or speed of change required.
The challenge for the aluminium sector (indeed for all sectors and the whole of humanity) is systemic change that not only delivers against climate goals, but also actively renews ecosystems, while improving equity of access to services by a growing global population. It is a challenge that is only possible with wholescale (whole value chain) action against articulated plans, with defined targets and harmonised methods of accounting, that can be interrogated through public disclosure which incorporates broad sustainable development goals. ASI is ready to help drive that action.