Alcoa
From WikiClimate
Company Details
- Company name: Alcoa Inc
- Country: USA
- Sub Sector: Metals & Mining
- Industry Group: Materials
- Parent Sector: Materials
According to its website, Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components including flat-rolled products, hard alloy extrusions, and forgings, Alcoa also markets Alcoa® wheels, fastening systems, precision and investment castings, and building systems. The Company has 97,000 employees in 34 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland.
Carbon Disclosure
The following data is © Carbon Disclosure Project and was provided by Alcoa in response to the Carbon Disclosure Project Greenhouse Gas Emissions questionnaires.
Regulatory risks
Since Alcoa is a major user of electrical power, we are concerned that Climate Change regulatory measures may impact the price and availability of electricity. To date, increased electricity prices in the European Union, due in part to the EU Emissions Trading System, has had the most significant impact on our primary products locations in Spain and Italy. An aluminum smelter in Germany where we had a minority interest was closed temporarily in year 2005 due to higher electricity prices.
In response, Alcoa is continuing efforts to reduce energy consumption and the GHG intensity of its electric power sources, concentrating on hydro power, high efficiency and combined cycle natural gas plants, and co-generation opportunities.
In support of Alcoa’s climate change policy, Alcoa continued in 2007 to be an active partner in the U.S. Climate Action Partnership (USCAP) to continue signaling the need to US lawmakers that economy wide legislative action is urgently needed. “Each year that we delay action to control emissions increases the risk of unavoidable consequences that could necessitate even steeper reductions in the future, at potentially greater economic cost and social disruption.”
Alcoa has also be actively involved in working with the European Commission to include provisions in the post 2012 Emissions Trading Scheme protecting the competitiveness of energy intense industries that operate at benchmark levels. Alcoa has also actively participated and commented on proposed climate change legislation in Canada, Australia, and in the United States at the federal, regional and state levels.
Alcoa assesses and responds to regulatory risks by means of a Global Alcoa Climate Change Strategy team. In year 2007, the team modeled the financial impacts of proposed legislation and international agreements. Responses to regulatory measures are coordinated via Alcoa’s Government Affairs committee.
Physical risks
Regarding physical risks, Alcoa assesses and incorporates the potential frequency and magnitude of extreme weather events into the operation of existing and into the design of new or expanded facilities worldwide. For instance, such considerations have been incorporated into the design and startup of our new Alcoa smelter in eastern Iceland.
In addition, prior to constructing any new facilities or expanding existing ones, Alcoa conducts an environmental impact assessment to determine what, if any, long term effects the project would have on the environment. This thorough analysis documents the level of ecosystem and species diversity within their area of influence using expertise and techniques, procedures, and information generally accepted by the international scientific community.
To address potential water shortages anticipated by the International Panel on Climate Change in their 4th Technical Assessment report, Alcoa has established a global water consumption reduction goal with an emphasis on regions where water may become particularly scarce such as Southwestern Australia (home to Alcoa’s largest bauxite refining operations.)
General risks
As previously mentioned, Alcoa is a major user of electrical power and continuously assesses various potential commercial and energy scarcity scenarios.
To mitigate related risks, Alcoa entered into extended long term contracts hydroelectiric power through 2030 in upstate New York and Quebec in 2007.
The attachment highlights Alcoa’s current assessment and projections for contracted, newly re-powered (contracted) and power exposed to the market through 2025.
Alcoa continues to be concerned that consumers or regulations will be biased against materials such as aluminum that require considerable energy to produce but which provide overall life cycle energy and greenhouse gas emissions advantages due to superior product characteristics (such as high strength to mass ratio, durability and recyclability.)
In response, Alcoa assesses and communicates the life cycle carbon footprint implications of its processes and products to customers, NGOs and government agencies.
General and regulatory risks management
Alcoa continues to reduce GHG emissions associated with operations under its operational control in response to its public goal to reduce and maintain its direct emissions 25% below its 1990 emissions despite significant growth. In 2007, Alcoa further reduced its emissions from 27% below 1990 in 2006 to 33% below 1990 in 2007. In the spring of 2008, Alcoa achieved its most recent goal to reduce an additional 1 million tons of CO2e from aluminium smelting operations.
To mitigate future energy supply risks, Alcoa continues to increase its supply of fabricated products sourced from recycled metal. (Recycled metal ingot only requires 5% of energy to process relative to primary aluminium ingot.). About 25% of Alcoa’s fabricated products are sourced from recycled aluminium and the recycling operation at Tennessee Operations was expanded significantly by the end of year 2007.
Alcoa is actively working as a member of the International Aluminium Institute to further reduce global industry emissions of perfluorocarbon gases. Members of the IAI on average (including Alcoa) achieved their 80% reduction goal based on year 2006 data and the industry is developing a post-2008 goal for further reducing these persistent GHG emissions by an additional 50%.
Finally, Alcoa continues to invest substantial resources to develop transformational technologies such as the carbonless “inert anode” and carbothermic aluminium production processes. These technologies would significantly reduce carbon emissions from global aluminum smelting operations.
Current and/or future financial effects of risks
In year 2007, the Alcoa Climate Team developed in conjunction with its supplier Pace Energy Services an emissions and financial model to assess potential impacts of proposed national legislation and international agreements. The finanical impact of various scenarios was modeled on all significant Alcoa facilities and against Alcoa's business and growth plans through 2020.
The financial implications of climate change are material to Alcoa’s financial performance and business strategies are being reassessed to address operations in an increasingly resource and carbon constrained environment.
The model will be routinely refined to reflect the current state of legislative and market cost inputs and where scenarios suggest potentially material impacts to Alcoa’s business strategies, those strategies will be revised to minimize carbon-related risks.
Opportunities presented by current or anticipated regulatory requirements on climate change
The most significant opportunities for Alcoa in an increasingly carbon constrained world is to market and provide additional aluminum and other advanced materials into new energy efficient applications for the building, commercial infrastructure, transportation and packaging markets.
For instance, aluminum shipments to the automotive & light truck market have increased over the past 15 years at a compound annual growth rate exceeding 4%. Today on average, more than 130 kg of aluminum is used in passenger vehicles produced in Europe, Japan, and North American, a 100% increase since 1990 due to the high strength to mass ratio, durability and recyclable nature of aluminum components.
Alcoa is the world leader in the design and supply of aluminum transportation products such as castings, wheels, and body-structures. Alcoa also maintains a dedicated business unit (Alcoa Electrical and Electronic Solutions) reflecting our key technical and systems capability in the areas of EDS, components, electronics and advanced electronics systems. Regulatory actions that require more efficient vehicles will significantly enhance the need and utilization of these Alcoa products.
Alcoa is particularly well placed to realize these opportunities as the world’s largest fabricator of aluminum semi-fabricated products. Alcoa is also a technology leader and annually spends more on R&D and product application development than any other aluminum company.
Opportunities presented by current or anticipated physical changes resulting from climate change
The climate is already changing in some regions and Alcoa has already identified and implemented actions to adapt to changing conditions.
For instance, over the past several years, Alcoa entered into a partnership with the government in Iceland to receive electricity for its new aluminum smelter in East Iceland from hydroelectric based on melting glacier flows. The East Iceland smelter was started up in 2007.
In addition, in year 2007 Alcoa entered into an agreement and feasibility study with the government in Greenland to assess the economic and ecological potential for another greenfield smelter based on electricity supply from melting glacier flows.
General opportunities presented by climate change
Alcoa continues to pursue additional significant opportunities for energy savings designs in the building, infrastructure and packaging markets to address the need of a more energy and constrained world.
Alcoa formed a “Green Infrastructure Market Sector” lead team to leverage Alcoa's design expertise, materials knowledge, global presence, relevant market experience, and sustainability brand to capture profitable organic growth. The initial focus for the Green Infrastructure Market Sector team will be to strengthen and expand our product and service offerings for green buildings and solar infrastructure.
Together with four existing market sector teams—aerospace, automotive, commercial transportation, and defense—Alcoa’s marketing and application engineering strategy is to focus on “Mega-trend” issues such as energy security & climate change opportunities in these particular markets. The teams are responsible for initiating and supporting profitable growth by:
- Creating, maintaining, and distributing best available market sector intelligence;
- Identifying opportunities for growth within the sector and driving development of new offerings that provide clearly differentiated value propositions to Alcoa’s customers and the marketplace;
- Developing market sector strategies; and
- Initiating growth opportunities that span multiple business units (BUs) or are not covered by current BUs.
Planned investment in products and services designed to minimise/adapt to effects of climate change
Growth - Alcoa completed its billion dollar investments and started up in year 2007 one of the lowest GHG emissions aluminum smelters in the world in eastern Iceland utilizing power from a new government sponsored hydroelectric facility. This greenfield smelter has been built to comply with some of the most stringent environmental regulations in the world.
Clean Power - Currently, Alcoa self-generates more than 1,000 megawatts of electricity, and we are investing more than US$1 billion to sustain and increase this position around the world. For instance, we are modernizing the power plant at our Newburgh, Indiana, facility, completing the modernization and re-licensing of our U.S. hydro facilities, and continuing to invest in three new hydro-electric facilities in Brazil. Alcoa is also in negotiations to develop and operate the world’s first aluminium smelter powered by geothermal energy.
R&D – Alcoa continues to partner with India’s Council of Scientific & Industrial Research in collaborative research projects that address critical global issues, such as energy efficiency, alternative and renewable energy sources, environmental technologies, and multi-material engineered solutions. In addition, Alcoa continues to fund and aggressively pursue the development of the carbonless “inert anode”, a stable, non consumable electrode for our smelting cells that will eliminate all GHG emissions from the electrolytic process. This technology will be made available to the industry after it is fully commercialized. We expect this development process to take a number of years since the technology is very complex.
In year 2007, Alcoa developed a process to sequester CO2 and neutralize a waste product from our bauxite refining operations in Western Australia. The use of CO2 for neutralization of bauxite residue has the potential to reduce emissions to the atmosphere by several million tons per year, industry wide.
Recycling - Recycled metal from products like used beverage cans, end-of-life vehicles, demolished buildings, and discarded consumer products continues to be an important source for our basic material, and its importance will keep growing. Aluminum ingot produced from recycled sources consumes only 5% of the energy required for primary production (mining of bauxite, smelting of aluminum oxide). Alcoa purchased just under 1 million metric tons of recycled metal in 2007 and has a goal to increase recycled metal for fabricated products to 50% by 2020.
In 2007, Alcoa announced an initiative to lead the US in increasing its aluminum can recycling rate from 52% to 75% by 2015. In support, Alcoa continues to operate one of the largest used beverage can recycling facilities in the world at our plant near Knoxville, Tennessee (USA). All of the recycled metal from the cans is returned directly to the can sheet manufactured at the adjacent rolling mill. In 2007, Alcoa invested in and completed the expansion of the recycling operations at this facility.
Future financial effects of opportunities presented by climate change
As previously mentioned, in year 2007, the Alcoa Climate Team developed in conjunction with its supplier Pace Energy Services an emissions and financial model to assess potential risks and opportunities of proposed national legislation and international agreements. The finanical impact of various scenarios was modeled on all significant Alcoa facilities and against Alcoa's business and growth plans through 2020.
In addition,each Alcoa business unit assesses current and future financial implications and potential opportunities to supply additional and innovative new energy efficient products and applications for the building, commercial infrastructure, transportation and packaging markets.
In particular, the “Green Infrastructure Market Sector” cross business unit lead team assesses the financial implications of existing and new products related to potential improved efficiencies in the building, packaging, defense and packaging sectors. Alcoa also utilizes a global strategic energy team to assess and capture opportunities related to green power supply.
Greenhouse Gas Emissions
- Greenhouse Gas emissions methodology used: GHG Protocol. Alcoa reporting conforms to the GHG Protocol and to the WRI/WBCSD/IAI aluminium industry sector protocol and calculation tools.
Are you able to provide a breakdown of your direct and indirect emissions under Scopes 1 and 2 of the GHG Protocol and to analyse your electricity consumption?
- Accounting year: ??
- Total global Scope 1 activity in Metric Tonnes CO2-e emitted: 31,100,000
- Total global Scope 2 activity in metric tonnes CO2-e emitted: 27,900,000
