More than Aluminum
Alcoa & Transportation
Despite significant economic challenges, Europe continues to lead the world in terms of product policies and regulations that focus on sustainability. Examples include the Ecodesign Directive, energy and environmental labeling, Product Environmental Footprint, and the Registration, Registration, Evaluation and Authorization of Chemicals regulation (REACH). The goal is to work toward a carbon-neutral society using both market-based and regulatory instruments.
Through European and global industrial associations, Alcoa is participating in the regulatory development process. This provides us with the unique opportunity to prepare for future requirements and challenges and position our products and operations accordingly. It also allows us to foresee developments in other parts of the world and build on those experiences to prepare not only ourselves, but also our partners.
We are committed to driving sustainability further into the day-to-day operations of our European businesses and products by focusing on Alcoa’s global strategic sustainability targets. Despite economic constraints, each of our locations continued to make progress against these corporate goals in 2012.
During the year, we made difficult decisions for locations that could no longer sustain operations from an economic viewpoint. We permanently curtailed our aluminum smelter in Portovesme, Italy, in the last quarter and temporarily and partially curtailed our Spanish smelters in Avilés and La Coruña in the second quarter. In the first quarter of 2013, both Spanish smelters went from 50% to 30% curtailed.
An Alcoa task force reached out to the regions’ major stakeholders, provided information to affected employees, and opened up the relevant information and consultation processes with the unions and works council representatives.
In these challenging times, we focused all efforts on sustaining the communities in which we operate by providing economic support to employees and, to the extent possible, opportunities for re-employment. We are also working to find redevelopment opportunities for those locations like Portovesme that have arrived at the end of their life as primary aluminum facilities. We consider this a critical part of our sustainability strategy.
Within Europe, we refine bauxite ore into alumina and transform alumina into aluminum through smelting. We manufacture aluminum sheet, plate, forgings, extrusions, truck wheels, and architectural products. We also produce industrial gas turbine and turbine engine components, as well as fastening systems for the transportation and industrial markets.
Many of the markets we serve in Europe, especially automotive and building and construction, suffered devastating effects in 2012 due to the lingering economic crisis. At year’s end, the European Commission identified both the need to reverse the declining role of industry in the region and the priority actions required for industrial sectors with strong growth potential, such as the aluminum industry. We consider this a positive redirection for aluminum, which is an essential component for renewed industrial growth in Europe and throughout the world due to its light weight, durability, and ability to be recycled infinitely.
Despite these difficult market conditions, we continued to engage with our customers to determine their needs for successful and sustainable products. We also worked to develop innovative solutions, many of which contribute to a green economy.
For example, we introduced a new line of forged truck wheels in Europe in 2012 to improve the fuel efficiency of commercial fleets. These wheels are up to 44% lighter than steel equivalents and support the move to higher-load-capacity tires. Of the four new wheel lines released, two offer maximum loads per wheel currently unavailable in steel.
We closely followed the development of product and chemical policies at the European level during the year to be prepared to meet any future requirements in terms of product performance and sustainability. We also monitored the development of voluntary standards that, in many cases, can become a market requirement.
To avoid supply disruptions for our operations and those of our customers after the May 2013 REACH registration deadline, we worked with our suppliers to ensure that our products, raw materials, and operations comply with the regulation.
Concurrently, we have been evaluating technical options and working with our customers to find appropriate alternatives for any materials in our products or production processes that might be targeted for reduction or elimination under REACH. The objective is to use more environmentally friendly materials that offer the same product attributes and are well accepted by our customers. Additional benefits to this material replacement include improved working conditions for our employees.
Together with other industry participants, we worked toward a definition and standardization of sustainability communication in the marketplace in 2012. This will pave the way for a transparent and comparable communication on sustainability data within the aluminum supply chain.
Emerging European regulations continue to raise the bar for environmental performance and technology development. In 2012, our focus was on two regulations:
- Best Available Technologies of Reference (BREF): Through the European Aluminium Association, we actively contributed to the development of the BREF document and associated emission limit values for the non-ferrous metals industry.
- European Emission Trading Scheme: Our European smelters and other facilities operating aluminum casthouses entered into this scheme as of Jan. 1, 2013. We undertook significant work to ensure compliance with pre-entry requirements, including emission permits, allocation of free allowances, and new monitoring plans.
A highlight of our 2012 environmental performance was our smelter in Avilés, Spain, setting the International Aluminium Institute’s 2011 global benchmark for perfluorocarbon (PFC) emissions for Söderberg technology. The plant reduced its PFC emissions by 78% between 2005 and 2012.
Overall, our direct greenhouse gases (GHGs) declined 9% in 2012. Our efforts to reduce these emissions during the year included energy-efficiency improvements at our refinery and smelter locations, the use of lower-carbon-intensive fuels, and PFC emission reductions at our smelters.
A decline in indirect emissions was mainly influenced by changes in the region’s energy mix, with renewable sources displacing coal-fired power plants.
The partial or full curtailment of operations at our Avilés, La Coruña, and Portovesme facilities also contributed to the reductions in both direct and indirect emissions.
While we continued to improve the energy efficiency of our European operations, we also secured long-term, competitive power contracts.
At the end of 2012, the bilateral power contracts for our three Spanish smelters expired. We negotiated new agreements that combine the market price of electricity with the value of interruptible services provided to the system operator. This solution allows our businesses to remain operational and focused on productivity improvements to achieve increased energy efficiency and long-term financial sustainability.
At our San Ciprián Refinery in Spain, we continued working to switch the fuel source from fuel oil to natural gas. In July 2011, we replaced 8% of the refinery’s annual fuel oil consumption with LNG. In early 2013, Gas Natural received approval for a natural gas pipeline to the San Ciprián region. Once completed in 2014, the pipeline will enable our refinery to further shift its energy mix and reduce its carbon dioxide (CO2) emissions by up to 250,000 metric tons per year, or 25%, while running at full capacity.
Our rolling business in Europe focused on strengthening its environmental management systems during 2012. It conducted a strategic analysis for each of its six plants, taking into account expected regulatory requirements through 2020 and current site conditions. The outcome was an action plan, including investments, to make sure the plants are well-prepared to comply with future requirements and that their environmental needs are part of the business plan.
The rolling business also implemented an electronic system to ensure that personnel transitions in environmental functions do not result in the loss of regulatory knowledge. This system includes a database of all environmental legal compliance actions, sends automatic electronic reminders to responsible personnel well in advance of required deadlines, and tracks compliance.
We have been using life cycle analysis to identify the environmental benefits of our production process improvements. In 2012, one such analysis compared the environmental impacts of different lengths of thermal treatment at our Kitts Green, United Kingdom, facility. Results indicated that the new reduced heat treatment saves 2.7 metric tons of carbon dioxide CO2 equivalents per furnace batch.
||Direct Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
|Indirect Greenhouse Gas Emissions
Million metric tons of CO2 equivalents
Millions of cubic meters
Thousands of metric tons
Health & Safety
The health and safety of our employees is our top priority.
Our focus in 2012 was on the continued deployment of human performance, which teaches employees how to recognize error and error-likely situations to predict, reduce, manage, and prevent fatalities and injuries from occurring. Another major initiative during the year was implementing the new corporate metric called the days away, restricted, or transferred (DART) rate. This rate helps us further focus our incident-prevention efforts on eliminating the more serious incidents first.
In 2012, our building and construction business, known as Alcoa BCS Europe, had its best annual safety performance since it was formed in 2002. The business, which has plants in France, Germany, Spain, the United Kingdom, and the Netherlands, achieved a 75% reduction in its total recordable incident rate and an 84% reduction in lost workdays compared to 2011.
Alcoa BCS Europe had deployed level 2 human performance tools (level 4 is the highest level of implementation) across all sites in 2012 and invested significant capital to eliminate fatality risks and install ergonomic improvements, such as vacuum lifts. The challenge for 2013 will be to sustain this level of performance in a deteriorating economic climate, especially in the construction sector.
The Global Primary Products Europe business, which includes our refineries and smelters, also achieved its best-ever safety performance in 2012. In addition, it posted the longest period ever—200 days—with zero recordable incidents and lost workdays.
Fatality prevention and human performance integration were the 2012 focus of our Global Rolled Products business in Europe. Human performance implementation started at the beginning of the year, with all sites reaching level 2 implementation by year’s end. The target for 2013 is for all to reach level 4.
The permanent curtailment of our Portovesme smelter in Italy and the temporary partial curtailment of the two smelters in Spain required significant effort to ensure there would be minimal environmental, health, and safety (EHS) issues. This included extensive work to maintain and adjust critical EHS controls and programs. The curtailments were executed without any critical incidents or injuries.
Health & Safety Performance
|Days Away, Restricted, or Transferred (DART) Rate
In 2012, we again focused on an important aspect of our European people strategy—the continuous development of individual and organizational performance.
We invested substantial effort to prepare our middle management for the next steps in their growth. We conducted detailed succession planning, offered a formal mentoring program, and enrolled top talent in internal training programs. We also rolled out the Alcoa Supervisory Excellence program across the European businesses to support our operational managers as they worked to achieve high performance with their teams in the current challenging business environment.
Another important step taken in Europe was the re-launch of the Alcoa Women’s Network (AWN) to promote gender diversity at all levels of the organization. AWN developed a program for 2012 through 2014 that is based on three components:
- A training program on management effectiveness;
- Promotion of the mentoring program among network members; and
- The enrollment of senior business leaders to serve as AWN ambassadors when they visit the European locations.
Response to the program has been very positive, with an average participation rate above 30 people for the different events.
Core elements of Alcoa’s Supplier Standards are sustainability, environment, health, and safety.
We require that our suppliers operate in an environmentally responsible and efficient manner to minimize adverse impacts on the environment. This includes:
- Complying with all applicable laws, regulations, and rules, including waste handling, energy-efficient processes, and products;
- Implementing available systems to reduce or eliminate wastes, including recycling, reuse, or material substitution;
- Managing risks and hazards; and
- Encouraging community engagement to foster social and economic development and a commitment to operating a safe and healthy work environment.
To integrate sustainability into our supply chain in Europe, we are participating in Alcoa’s Global Supplier Sustainability Program. This program focuses on our key suppliers that pose the greatest sustainability opportunities and risks, with approximately 15% based in Europe.
In 2012, our top 50 suppliers in Europe completed a questionnaire to assess their respective sustainability programs. Topics assessed included environmental management systems, health and safety programs, labor practices, and more. We assigned a single procurement contact to work with suppliers identified as having emerging or developing programs to help improve or expand them.
This ongoing process of communicating expectations, assessing, educating, and monitoring will be expanded to include our 100 top European suppliers in 2013.
Our European locations continued their implementation of the Alcoa Community Framework. This tool guides our plants on how to develop a comprehensive approach to understanding community needs and concerns and proactively contributing to the development of a sustainable relationship with our local and regional stakeholder groups.
In 2012, many of our European sites organized stakeholder dialogue sessions and further improved their community interactions based on a comprehensive community assessment completed at the end of 2011.
Because quite a few of our locations, particularly those in Spain and Italy, were facing significant business challenges, we maintained close connections with the community to help manage these challenges, which often impact our various stakeholder groups.
We use a coordinated approach to add value to the communities in which we operate. Our activities include building the right networks, providing appropriate Alcoa Foundation support, and enabling our employees to lend a helping hand through company-sponsored volunteering programs.
In 2012, Alcoa Foundation invested almost US$1.8 million in the European communities in which we operate. The grants focused on supporting education, the environment, and community enhancement.
Some examples of these investments by country include:
- Belgium: Extension of a sustainable transportation and education project with local schools in the Beringen region.
- France: Two job-readiness programs with regional training centers.
- Germany: Programs focused on education and environment across the country.
- Hungary: A training program on aluminum recycling in Székesfehérvár.
- Iceland: Development of a network and tools to better share information and knowledge in Fjarðabyggð.
- Italy: An educational package that teaches schoolchildren the value of recycling cans.
- Netherlands: The next phase in training for children on sustainable building assessment.
- Norway: Projects focused on science, technology, engineering, and math (STEM).
- Spain: Implementation of a higher degree level and improved quality for mechanical manufacturing education at Xove School.
- United Kingdom: STEM projects in local schools that are run by two Alcoa plants.
- Europe: A joint project with the International Union for the Conservation of Nature called the Powered by Nature Awards. Also a three-year program to contribute to the understanding of energy challenges and the development of sustainable energy policies in Europe, in cooperation with the College of Europe in Bruges, Belgium.
In 2012, our European employees volunteered 303,743 hours in their local communities through Alcoa’s ACTION, Alcoans in Motion, and Bravo! programs, earning US$1,713,500 for their non-governmental organizations, charities, and associations.
Employee Volunteer Hours
Key 2012 Stakeholder Issues
|Avilés and La Coruña, Spain
||Temporary partial curtailments.
||We started negotiations with various stakeholder groups in January 2012 to agree on a temporary partial curtailment of the plants. The curtailments were fully implemented in June, and both smelters went from 50% to 30% curtailed in the first quarter of 2013.
||In January 2012, we initiated negotiations with various stakeholder groups to implement a full curtailment of the plant, which occurred at year’s end. We have agreed to keep the location in a restart condition for a year to potentially sell it to a viable third party.
|Avilés, La Coruña, and San Ciprián, Spain
||Through intensive stakeholder dialogue on local, regional, and national levels, we worked on an energy solution for our three Spanish smelters. All had long-term energy contracts that ended on Dec. 31, 2012, and each faced energy costs that are among the highest in Europe. At the end of the 2012, the Spanish government put a regulatory framework in place that provides measures to help maintain the competitiveness of Spain’s energy-intensive industries, including aluminum. The Spanish government may submit the framework to the European Commission for legal certainty purposes.
|Alcoa Fjarðaál, Iceland
||Increased fluoride detected in grass.
||In October 2012, Alcoa Fjarðaál measured increased fluoride levels in grass around the plant. Following root-cause analysis, the plant took several steps to fix related technical issues to reduce the fluoride emission levels. We engaged with the general public and farmers around the location.
Excellence in Product Development Award—Faurecia
Alcoa Global Rolled Products
Material SQIP Bronze Award—Airbus Procurement
Alcoa Fastening Systems
Safety Improvement Award—CRAM Region Alsace Moselle
Alcoa Architectural Products—Merxheim, France
Certificate for Diversity 2012—Hungarian Business Leaders Forum
The Company Close to Our Heart 2012 Award—Joint Venture Association
Family-Friendly Workplace Certificate—SZENA Association for Families
Female Executive of the Year in Europe, the Middle East, and Africa (gold)—Stevie Awards
Janne Sigurðsson, Managing Director, Alcoa Iceland
Top 100 Global Sustainable Companies—Storebrand Trippel Smart
Best Performance in Average Anode Effect Minutes per Cell Day—International Aluminium Institute
Alcoa Inespal S.A.—Avilés, Spain
Best 2011 Perfluorocarbon Emissions Values among All Söderberg Plants in the World—International Aluminium Institute
Alcoa Inespal S.A.—Avilés, Spain
Investors in People Award—Investors in People
Alcoa European Mill Products—Kitts Green, United Kingdom
Fitness Program Gives Russian Youth Access to Healthy Lifestyles
Segregating Pedestrians and Mobile Equipment
Alcoa Russia Focused on Fatality Prevention
Mentoring Program Builds Management Strength in Russia
Unique Alcoa Retraining Center Helps Former Employees Gain Employment