Reducing Our Carbon Footprint
For nearly two decades, Alcoa has been actively engaged in efforts to reduce greenhouse gas (GHG) emissions. We have done this principally by reducing our own carbon footprint and delivering light, strong, and recyclable aluminum products that help our customers reduce their footprints as well.
While characteristics of aluminum and aluminum products have a significant role in reducing GHG emissions, the production of primary aluminum results in GHG emissions mainly due to the amount of energy required. The aluminum industry, including associated power production, is responsible for about 1% of all man-made GHG emissions.
We have been a leader in reducing GHG emissions from our operations for more than two decades. In the early 1990s, we made our first voluntary GHG reductions. In 1998, we established a Climate Change Strategy Team that developed and promoted our first position on climate change, including our long-term goal to reduce direct GHG emissions by 25% below 1990 levels by 2010.
Achieving that goal well ahead of schedule in 2003, we established a new goal to reduce 2005 levels of total carbon dioxide equivalent (CO2e) intensity in our Global Primary Products business group (refining and smelting) by 30% by 2020 and 35% by 2030. Carbon dioxide is our largest component of GHGs.
Between 2005 and 2013, we reduced the GHG emission intensity of our Global Primary Products business group by 25.5%. The reduction came from repositioning our operations to take advantage of clean hydroelectric power, quickly sharing best practices to reduce process emissions, and targeting energy efficiency at every location.
During 2013, we reduced our absolute GHG emissions by 3.1 million metric tons from 2012. Our total 2013 GHG emissions (CO2 equivalents, or CO2e) equaled 43.4 million metric tons, of which 28.2 million metric tons were direct emissions.
The reduction primarily came from closing or curtailing smelters that were less GHG-efficient (we closed or curtailed 321,000 metric tons, or 8%, of our global smelting capacity in 2013). This allows us to take advantage of opportunities to move to more GHG-efficient energy sources in our existing smelters.
In 2013, we determined that the emissions associated with the electricity production by Alinta at our Pinjarra Refinery in Australia was not part of our carbon liability and not under our operational control. The impact of excluding these emissions (1%) is not material to our consolidated emissions inventory.
Global Primary Products Greenhouse Gas Emission Intensity
Metric tons of CO2 equivalents per ton of production
(IPCC, 4th TAR)
(IPCC, 2nd TAR)
(IPCC, 4th TAR)
(IPCC, 2nd TAR)
|Reduction from Baseline
|Goal: 30% reduction||Progress: As of Dec. 2013 |
Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Our emissions are reported per the World Resources Institute (WRI) GHG Protocol for facilities where we have operational control. We also report consistent with the Aluminium Sector GHG Protocol (WRI sector supplement). We utilize Intergovernmental Panel on Climate Change (IPCC) and supplier emission factors. For instance, we began using global warming potentials from the 4th IPCC Technical Assessment Report in 2013 to be consistent with changes required by the European Union Emissions Trading Scheme.
In 2013, our direct emissions were 28.2 million metric tons (MMT) of CO2e, 0.016 MMT of CO2e associated with methane, 0.036 MMT of CO2e associated with nitrous oxide, and 2.09 MMT of CO2e associated with perfluorocarbon (CF4 & C2F6) emissions from aluminum smelting. There were no significant sulfur hexafluoride, hydrofluorocarbon, or biogenic emissions. Estimated indirect CO2e emissions are those occurring at our purchased electricity supplier facilities.
Scope 3 Emissions
In 2013, our estimated Scope 3 (supply chain) emissions were 4 million metric tons of CO2e emissions. Most of these emissions were associated with the purchase of raw materials, fuels, and transportation.
Climate Change Strategy
We have refined our climate change strategy so we can adapt to specific outcomes emerging from business, technical, and legislative developments. Specifically, the strategy allows us to:
- Incorporate the potential physical impacts of climate change into growth decisions and operational planning for existing assets;
- Integrate carbon risk into capital planning and valuation of mergers and acquisitions; and
- Establish a prioritized action plan for mitigating carbon risk and maximizing business opportunities.
Our strategy is supported by a quantitative model developed internally that allows us to forecast the impact of emerging legislative programs in terms of compliance requirements and the cost of energy. This model will be updated as timing and policy content evolves, and the output will be used to guide our strategic decisions on growth and deployment of capital.
Our actions in 2013 can be summarized around the six main elements of our strategy: emissions reduction; strategic energy decisions; stakeholder engagement; product advantage; climate adaptation; and policy engagement.
A key aspect of our improvement in GHG emissions remains our ongoing pursuit of reducing perfluorocarbons (PFCs), our second largest component of GHGs, in our smelting process. From a baseline year of 2005 through 2013, we have reduced PFC emissions by 2 million metric tons of CO2e.
We continue to seek opportunities for further reductions in our operations’ direct emissions and aggressively explore opportunities to reduce both the energy intensity in each of our processes and the resulting indirect CO2e emissions.
As an indication of our commitment to these efforts, we included an annual target in our 2013 variable compensation program that is based on CO2e emission reductions gained from process improvements and improved energy efficiency. The target focused on enhanced energy efficiency across all of our operations. Under this program, we reduced energy intensities in our upstream (primary aluminum), mid-stream, and downstream operations by 287,300 metric tons of CO2e in 2013.
We continue to research transformational production technology that will reduce direct emissions, improve energy efficiency, or both. These technologies could have broad implications for the entire industry.
Because commercial application of these technologies will take some time, we are also exploring opportunities to develop or acquire carbon offsets in each region to help us meet eventual compliance requirements in the short-term. Actions will involve self-managed projects, as well as partnership arrangements with credible organizations engaged in carbon offsets in strategic regions.
Strategic Energy Decisions
Equally important to our direct process emissions are the indirect emissions associated with the electricity we purchase, primarily in our smelting business.
Our global strategic energy group is constantly looking for ways to source our operating locations with low or zero carbon-based generation. However, many regions in which we operate do not currently have such options for energy. Despite this hurdle, we continue to pursue opportunities to reduce the carbon intensity of the electricity we buy.
Today, 62% of the energy used by our smelters comes from hydroelectricity, both purchased and generated. We are committed to decreasing our reliance on fossil fuels by increasing the use of natural, renewable energy sources that help lower CO2e emissions.
We continue to be actively involved in the policy debate around climate change and engage in meaningful conversations with multiple stakeholders around the globe on the issue of climate protection.
Through partnerships with non-governmental organizations, nonprofits, civic groups, and industry associations, we gain greater insights. Some of our partners include the World Resources Institute, The Nature Conservancy, Brookings Institution, the Brazilian Business Council for Sustainable Development, the Business Roundtable, and the World Economic Forum Global GHG Registry.
In collaboration with the World Resources Institute and the World Business Council for Sustainable Development, we have been actively involved in the development and dissemination of a common, global GHG protocol.
In the past, we have pilot tested draft protocols for accounting and reporting GHG emissions across a product’s life cycle. We have promoted the adoption of a number of these protocols in the Global Reporting Initiative’s new G4 standard for sustainability reporting, which was launched in May 2013. We are currently actively involved in the development of protocols related to purchased electricity and a standard for quantifying avoided GHG emissions.
In recent years, we have increased our focus on helping customers understand both the role that aluminum can play in the mitigation of global warming and the benefits of our products through product-specific life cycle analyses. These analyses show that the lightweight, strength, and recyclability characteristics of aluminum-based products can create a clear advantage relative to other materials in terms of reducing or avoiding GHG emissions. See the Product Design & Life Cycle section for specific examples.
The potential physical impacts of climate change on our operations are highly uncertain and will be particular to geographic circumstances. These may include shortages of water or other natural resources and changes in rainfall patterns, sea levels, storm patterns and intensities, and temperature levels. Such effects may adversely impact the cost, production, and financial performance of our operations.
To minimize the potential impact of changing climatic conditions, we have included additional considerations into the minimum design criteria for new facility construction. 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 emergency-planning updates.
Our approach to climate policy involves working proactively with policymakers in each region to ensure that the significant benefits of aluminum and aluminum products are included in discussions regarding climate solutions. Where appropriate, we also provide detailed analyses to show the potentially devastating economic consequences that could result from climate legislation that does not properly address the potential for carbon leakage—the shifting of production and jobs from regulated to non-regulated regions of the world.
Our longstanding efforts to voluntarily reduce emissions have given us the credibility to provide practical input into the development of policy language. Accordingly, we are often invited to provide expert testimony to, and collaborate with, policymakers as they consider how to address this important issue. In addition to our individual efforts to shape policy, we also engage with many industry groups where our interests are aligned. These include the International Aluminium Institute, The Aluminum Association, and the Business Roundtable.
Project to Reduce Anode Effects Eliminates CO2 Emissions, Reduces Costs
Make an Impact (U.S.)
Make an Impact (Australia)