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Norsk Hydro clients want ‘green’ aluminium

OSLO, October 17, 2014

Some major customers of Norwegian aluminium maker Norsk Hydro want it to certify metal made with clean hydro power to help a shift from high-polluting fossil fuels and combat climate change, chief executive Svein Richard Brandtzaeg said.

He also said the company, the world's number nine producer of primary aluminium in 2013, was investing in measures to cut greenhouse gas emissions because it expects governments to impose a global price on carbon pollution sometime in future.

Some customers wanted proof that aluminium is from a low-emissions source to help limit global warming, he said. That would echo other systems that certify that commodities such as timber, coffee or palm oil come from sustainable farms.

"We have customers now that would like us to give identification and also like to have a stamp - 'Hydro' - inside. The name itself reflects hydro power but they would like us to certificate the hydropower-based metal in Norway," he said.

He declined to name major business customers, nor say if Hydro might start stamping metal produced in Norway in future. A problem is how to certify a metal, a step likely to raise prices, when it trades on world markets.

"We believe that strict climate regulations are good for business and we are adapting to a future where there will be a global cost on carbon dioxide," Brandtzaeg told the Reuters Global Climate Change Summit.

Norsk Hydro, which produced about a million tonnes of primary aluminium in Norway out of a total of 1.9 million tonnes in 2013, said its use of clean hydro power in the Nordic nation was a big advantage over high-polluting coal-powered production.

"If what we produce in Norway was replaced by a million tonnes in China, then global emissions would rise by 13-14 million tonnes per year. That is quite a big chunk," he said.

That is bigger than the annual emissions of Luxembourg. Norsk Hydro also produces aluminium using fossil fuels, including in Qatar where it uses natural gas.

AUTOMOTIVE ALUMINIUM

Brandtzaeg also said Norsk Hydro's efforts to cut energy use, to replace steel in cars with lighter aluminium and to double its recycling of aluminium to 250,000 tonnes a year by 2020 from 2012 levels would all help to limit climate change.

He said that a push to invest €140 million ($177 million) to produce aluminium for cars in Germany would be aided by European Union plans to cut emissions for new cars. US and other standards are also getting tougher.

"There will be a lot of investments in aluminium in automotive. The Audi A6 is almost totally aluminium," he said.

Hydro says its greenhouse gas emissions from its businesses, including electricity production, totalled 12.6 million tonnes in 2013, down from 13.6 million in 2012.

Norsk Hydro set a goal last year of becoming "carbon neutral" by 2020. It says it is about one million tonnes of carbon dioxide a year above the goal.

Carbon neutrality usually means having no net emissions to the atmosphere, for instance by planting forests - which soak up greenhouse gases as they grow - to offset greenhouse gas emissions from burning fossil fuels.

Hydro's accounting, however, allows the company to say that lightweight aluminium in cars reduces its carbon emissions, relative to a baseline of emissions had the vehicles been made of heavier steel.

"When you replace steel, for each kilo of aluminium you use in cars you save 17 kilos of carbon dioxide over the lifetime of the car," Brandtzaeg said. Hydro declined to give all numbers and assumptions underlying its goal. - Reuters




Tags: aluminium | Green |

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