Building on Two Decades of Leadership
We have been a leader in reducing greenhouse gas (GHG) emissions for more than two decades, not only shrinking our own carbon footprint but also those of our customers through the products we manufacture.
Continuing down this path, we are transforming into a global manufacturer of innovative, multi-material products and solutions that improve energy efficiency, reduce GHG emissions, and enhance our natural environment. Examples include new automotive alloys and technologies; aerospace engine parts, structures, and fasteners; and resilient and energy-saving building products designed to address a changing climate. See the Products section for additional information.
GHG emissions are inherent in the aluminum-making process, particularly in the energy-intensive smelting phase. The global aluminum industry, including associated power production, is responsible for about 1% of all man-made GHG emissions.
It is important to note that emissions avoided by using and recycling aluminum and aluminum-based alloys are substantial relative to the emissions generated in the manufacturing phase due to the material’s light weight, infinite recyclability, and other emissions-reducing benefits.
We have attained ambitious GHG-reduction targets by increasing our use of hydroelectricity, developing and sharing emissions best practices, and increasing energy efficiency. Our current target is a 30% reduction in the carbon dioxide equivalent (CO2e) intensity in our Global Primary Products business group (mining, refining, smelting, casting, and energy), also known as our upstream business, by 2020 and 35% by 2030 from a 2005 baseline. Carbon dioxide represents most of our greenhouse gas emissions.
We achieved a 25.9% intensity reduction in 2014 from the baseline and a 1.6% improvement over 2013. Our total 2014 CO2e emissions equaled 40.4 million metric tons, of which 26.9 million metric tons were direct emissions. This is a 6.8% reduction in total emissions from 2013.
Transformation of our upstream business was a major factor behind these achievements, as we saw a 14% reduction in smelting capacity through the closure or idling of some of the highest GHG-emitting facilities in our system during 2014.
Global Primary Products Greenhouse Gas Emission Intensity
Metric tons of CO2 equivalents per ton of production
(IPCC, 4th TAR)
(IPCC, 4th TAR)
|Reduction from Baseline
|Goal: 30% reduction||Progress: As of Dec. 2014 |
Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Scope 3 Emissions
Our Scope 3 (supply chain) emissions in 2014 were 4.6 million metric tons of CO2e. Most of these emissions were associated with the purchase of raw materials, fuels, and transportation.
Climate Change Strategy
There are five main elements to our climate change strategy—emissions reduction, strategic energy decisions, stakeholder and policy engagement, product advantage, and climate adaptation.
Our emission-reduction efforts focus on process improvements, transformational technology, and energy sources and efficiency, primarily in our upstream business.
In 2014, our smelters around the world improved their processes to reduce emissions of perfluorocarbons (PFCs) by 0.45 million metric tons over 2013 and 2.4 million metric tons from a 2005 baseline. By mass, PFCs are the second most significant type of greenhouse gases emitted by our operations.
While our Global Rolled Products and Engineered Products and Solutions business groups do not emit significant GHG emissions, we still work to minimize their impact in this area. For example, we placed all of their U.S. manufacturing locations in the Better Buildings Better Plants program run by the U.S. Department of Energy (DOE). By striving to achieve our pledge to reduce the combined energy intensity of these locations by 25% by 2020 from a 2005 baseline, we also will be reducing their direct and indirect GHG emissions.
Our 2014 variable compensation program again included an annual target based on CO2e emission reductions gained from process improvements and improved energy efficiency. Under this program, we improved energy intensity and achieved a corresponding reduction of 362,800 metric tons of CO2e during the year.
Strategic Energy Decisions
To minimize our direct and indirect emissions, we are committed to reducing the carbon intensity of the energy we generate and purchase.
A number of our facilities have switched their fuel sources, resulting in significant reductions in GHG emissions. For example, our refinery in San Ciprián, Spain completed shifting its energy mix from fuel oil to natural gas in 2014 and expects to reduce its CO2 emissions by up to 250,000 metric tons per year.
The opportunity to purchase power from natural, renewable energy sources remains limited in many regions in which we operate. Despite this challenge, more than 68.2% of the purchased electricity used by our smelters in 2014 came from renewable sources.
Stakeholder and Policy Engagement
We continue to engage with governments, non-governmental organizations, nonprofits, civic groups, industry associations, and other relevant stakeholders around the world on the issue of climate change. We work to ensure the significant benefits of aluminum are included in policy discussions, and we also gain deeper insight into stakeholder concerns.
We have been actively involved in the development and dissemination of common global GHG protocols. In 2014, we reviewed draft protocols for Scope 2 GHG emissions being developed by the World Resources Institute and the World Business Council for Sustainable Development. We also submitted comments to the U.S. Environmental Protection Agency on its Proposed Clean Power Plan, which seeks to cut carbon emissions from existing power plants. Read the comments. go
We continue to help policymakers and customers understand the role that aluminum, aluminum-based alloys, and multi-material solutions can play in the mitigation of global warming. Life cycle assessments show that the lightweight, strength, conductivity, and recyclability characteristics of aluminum-based products can create a clear advantage in reducing or avoiding GHG emissions compared to other materials. See the Products section for additional information.
The potential physical impacts of climate change on our operations are highly uncertain and will be particular to geographic circumstances. In 2014, we conducted an analysis of climate risk and changing weather patterns to determine how they may adversely impact the cost, production, and financial performance of our operations over the next several decades. The analysis confirmed information contained in our enterprise risk model, which is reviewed on a regular basis with the Alcoa Board of Directors and Executive Council.
Climate factors are likely to have an impact on our global mining operations, access to energy (hydropower in particular) and freshwater, supply chain efficiencies, and the transportation of raw materials. Changing weather patterns could also affect our products and growth projections, global demand for aluminum, sites for new operating locations, availability of skilled workers, and retrofits to existing operations (including bauxite residue management areas).
To minimize the potential impact of changing climatic conditions, we have included additional considerations into the minimum design criteria for any new facilities we construct. These criteria require broader analysis of future conditions that might necessitate the need for relocation and/or protection against climate-related impacts. For existing facilities, we incorporate the same process for any significant plant upgrades, and we review appropriate countermeasures during updates of our emergency preparedness plans.
We also continue to develop innovative products that help customers in key markets, such as building and construction, prepare for climate change. See the Products section for examples and additional information.
Make an Impact (U.S.)
Make an Impact (Australia)