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alcoa MD challenges national renewable energy target
The potential impacts to the aluminium industry of the Federal Government’s proposed National Renewable Energy Target as well as the emissions trading scheme were raised by Alcoa of Australia’s MD, Alan Cransberg, during his address this month to the CEDA (Committee for Economic Development of Australia) Resources Overview in Perth.
 
Mr Cransberg indicated that the Australian aluminium industry cannot tolerate cost imposts from the National Renewable Energy Target (NRET) that competitor countries do not face.  This comes on top of increased costs for the sector from the emissions trading scheme.
 
“It’s vital that industry is not hit by further cost increases under a National Renewable Energy Target.”
 
Mr Cransberg explained that under the scheme large energy users must purchase Renewable Energy Certificates (REC).
 
“This exposes the Australian aluminium smelting industry to significant cost increases – none of which can be passed onto customers in the absence of a comparable impost on international competitors,” he said.
 
The National Renewable Energy Target must be applied in a way that recognises the emissions intensive trade exposed sector or it will become harder and harder for these industries to do business in Australia, he said.
 
Commenting on the proposed emissions trading scheme Mr Cransberg said the most critical issue for the Australian aluminium industry was regarding certainty in permit coverage and ensuring any erosion of permit allocation does not occur at an unsustainable rate.
 
“The greatest concern I have is that any shielding for emissions intensive trade exposed industries will fail if allocations are eroded too quickly,” he told the audience. 
 
Commenting on the permits afforded to the industry (aluminium smelting would initially receive permits for around 90% of baseline emissions, alumina refining would receive around 60% of baseline emissions), Mr Cransberg said that while these are important to the industry’s future in Australia, they are not a “free ride”.
 
“Our operations face significant financial imposts not faced by competitors in China, Russia, the Middle East and elsewhere.
 
“Like other commodity exporters, cost increases cannot simply be passed on to overseas customers,” he explained.
 
“The aluminium industry will continue to ensure governments understand what is at stake here, and we will also continue to improve energy efficiency and reduce emissions within our business.”
 
Alcoa continues to work to ensure that renewable energy is part of the Australian energy supply mix and works in partnership with the Portland Wind Farm which connects to the grid through the Portland Aluminium Smelter in Victoria.
 
background to NRET
The National Renewable Energy Target is separate from the proposed carbon pollution reduction scheme/ emissions trading scheme.  The NRET is designed to increase the production of renewable energy in Australia’s electricity supply.  To achieve this, any organisation which buys wholesale electricity has a legal liability to source an increasing percentage of their electricity purchases from renewable-based generation.  This is implemented by those companies having to buy and surrender renewable energy certificates (RECs) in proportion to their purchase of electricity.  Due to renewable energy being higher in cost than other sources, the RECs come at a significant cost premium.

The NRET has actually been in place since 2001 but the Rudd Government is planning to significantly increase the existing arrangement.  It has announced a target that at least 20% of Australia’s energy production will come from renewable sources by 2020.
 
CSIRO report confirms air quality
An independent report released last month by CSIRO Chief Research Scientist Ian Galbally confirms that organic compounds in the air around Yarloop, near Alcoa’s Wagerup Alumina Refinery are typical of a rural environment.
 
CSIRO undertook an intensive eight week air monitoring study from August 10, 2006 - October 7, 2006, to further understand air quality in the region around the refinery.  Monitoring was undertaken using CSIRO’s high-tech Proton Transfer Reaction Mass Spectrometer (PTRMS), which can continuously monitor at very low levels for volatile organic compounds (VOCs) in the air. 
 
Mr Galbally said the VOCs measured in air around the refinery are at the low end of measurements taken from other rural environments. He said that odour events observed during the study were probably caused by gases with very low odour detection thresholds, present in concentrations of a fraction of one part per billion in the air that could not be detected, even with the highly sensitive equipment.
 
Alcoa’s WA Operations Manager Simon Butterworth said the CSIRO report is consistent with previous studies showing the refinery to be safe for Alcoa employees and the community, and local air quality to be typical of a rural Australian environment. The refinery remains a small contributor to ambient air quality, with VOCs coming from many other sources, such as:
  • natural emissions from plants and grasses, decomposition of leaf litter, 
  • wood heaters, tobacco smoke, combustion engines, 
  • solvents, landfill sites and vehicle exhaust.
 
“The results of the CSIRO report are consistent with a large number of studies previously undertaken by Alcoa and independent experts using sophisticated air testing equipment. These studies confirm that the Wagerup refinery is a very small contributor to ambient air quality and the air quality is typical of a rural environment,” Mr Butterworth said.
 
Since 1998, Alcoa has spent more than A$54 million on new technologies and other improvements at the refinery to reduce emissions and odour. This has made Wagerup the most advanced alumina refinery in the world in this respect.
 
Improvements included fitting multi stage dust collectors to the calciners which reduce peak dust emissions, installation of a system to capture gases from various sources within the digestion area of the plant, and increasing the height of the Multiflue (set of 5 stacks) to enable better dispersion of emissions to reduce the concentration of emissions at ground level.
 
An improvement was also made to the liquor burner – equipment required to remove organic matter during the refining process. While emissions from the liquor burner have previously been successfully controlled by a Catalytic Thermal Oxidizer (CTO), which eliminated a high percentage of VOCs, the opportunity for further improvement in emissions management was taken with the installation of more sophisticated emission control equipment - a $10M Regenerative Thermal Oxidiser (RTO). This RTO destroys about 99% of VOC emissions, and was installed during the period of the study.  


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