Reducing Our Carbon Footprint
For nearly two decades, Alcoa has been actively engaged in efforts to reduce greenhouse gas (GHG) emissions. We’ve 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. About half of the energy we use for our operations globally is fossil fuel-based.
We have been a leader in reducing GHG emissions from our operations for nearly 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, we established a new goal to reduce 2005 levels of total carbon dioxide (CO2) intensity in our Global Primary Products business (refining and smelting) by 30% by 2020 and 35% by 2030.
Since 2005, we have reduced the GHG emission intensity of our Global Primary Products business by 23.2%. 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.
Our total 2012 GHG emissions (CO2 equivalents, or CO2e) equaled 46.5 million metric tons, of which 29.8 million metric tons were direct emissions. The latter decreased 2.6% from 2011 levels.
Global Primary Products Greenhouse Gas Emission Intensity
Metric tons of CO2 equivalents (CO2e) per ton of production
|2012 Reduction from Baseline
|Goal: 30% reduction||Progress: As of Dec. 2012 |
Greenhouse Gas Emissions
Million metric tons of CO2 equivalents (CO2e)
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 2012 can be summarized around the six main elements of our strategy: emissions reduction; strategic energy decisions; stakeholder engagement; product and market evolution; climate adaptation; and policy engagement.
A key aspect of our improvement in GHG emissions remains our ongoing pursuit of reducing perfluorocarbons (PFCs) in our smelting process. From a baseline year of 2005, we have reduced PFC emissions by 2 million metric tons. 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 CO2 emissions.
As an indication of our commitment to these efforts, we included an annual target in our 2012 incentive compensation program that is based on CO2 emission reductions gained from process improvements and improved energy efficiency. The target focused on reducing anode effects in our smelters, which result in decreased PFC emissions, and gaining incremental energy efficiency from all other operations. We achieved both the PFC and energy-efficiency targets for the majority of our businesses.
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 no-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 CO2 emissions.
In September 2011, we became one of the first manufacturing companies to sign on to the U.S. Department of Energy’s Better Buildings, Better Plants Challenge as one of our Clinton Global Initiative commitments. We join companies such as 3M, GE, and Nissan in setting goals for reducing energy usage across our company.
During 2012, we progressed with our showcase project for the challenge—the installation of new melting technology at our Barberton, Ohio, USA, wheels facility.
Between 2005 and 2012, our U.S. midstream and downstream manufacturing locations demonstrated a 10% improvement in energy intensity. This was solid progress against our pledge of a 20% reduction by 2020.
See the Energy section for additional information.
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 World Business Council for Sustainable Development, The Nature Conservancy, Brookings Institution, the Brazilian Business Council for Sustainable Development, the Business Roundtable, and the World Economic Forum Global GHG Registry.
Product and Market Evolution
In recent years, we have increased our focus on helping key 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 light weight, 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.
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 2010, we were one of a number of corporations that pilot tested another draft protocol for accounting and reporting GHG emissions across a product’s life cycle. In 2011, the two organizations published and launched the Product Lifecycle Accounting and Reporting Standard and the Corporate Value Chain Accounting and Reporting Standard. During 2012, we promoted the adoption of the protocol in the Global Reporting Initiative’s new G4 standard for sustainability reporting, which will be launched in May 2013.
We also have been working with local communities and governments to improve end-user recycling rates, since recycling aluminum produces 95% less GHG emissions than the production of new aluminum.
Our strategic goal is to increase the used beverage can recycling rate in the United States to 75% by 2015 and the global rate to 90% by 2030. In 2011, the most current year for data, the U.S. rate stood at 65% and the global rate at 73%. See the Recycling section for additional information on our efforts in this area.
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 more thoroughly 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 provided 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, the U.S. Climate Action Partnership (Alcoa is a founding member), and the Business Roundtable.
Project to Reduce Anode Effects Eliminates CO2 Emissions, Reduces Costs
Bacteria Consumes Refining Impurity in Alcoa-Developed Process
Alcoa of Australia Climate Change Update
Alcoa Fjarðaál (Iceland) Climate Change Update
Make an Impact (U.S.)
Make an Impact (Australia)