Seeing aluminium into 2024
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CanTech International speaks to the Aluminium Federation (ALFED), the Aluminium Packaging Recycling Organisation (Alupro) and the International Aluminium Institute (IAI) about trends and what lies ahead for the aluminium sector
CanTech International caught up with three leading aluminium organisations responsible for informing the sector and working with it to drive change. Tom Jones, CEO of UK-based ALFED; Tom Giddings, executive director of Alupro in the UK, and Miles Prosser, secretary general of the IAI, offer their views on the year just gone and the future state of packaging and the global aluminium supply chain.
What industry topics became more prevalent in 2023?
Giddings: While some industry sceptics had suggested that high recycling rates reported during the Covid-19 pandemic were just a short- term trend, it’s reassuring to see that impressive volumes and positive consumer recycling behaviours have continued.
Indeed, according to recent data published on the National Packaging Waste Database (NPWD), 137,275 tonnes of aluminium packaging have already been captured across the UK to date in 2023, representing a 17 per cent increase compared to the same period last year (116,439). This can, to some extent, be accounted to positive work from across the industry when it comes to investing in and delivering consumer awareness and education programmes. However, it also demonstrates a wider behavioural shift, with households committing to doing the right thing when it comes to best practice recycling. This trend is snowballing, with aluminium packaging recycling volumes increasing in parallel.
Jones: In a challenging economic environment and disruptions to global aluminium supply chains, demand for aluminium [in general] has yet to recover from a post-pandemic slump. We have, however, seen recent spikes, particularly for the green technology sector. The need for aluminium in increasingly popular renewable energy tech, such as solar panels and wind turbines, as well as in EV manufacturing, has kept demand high at a time of heightened sustainability commitments across a number of industries.
We have also seen a greater emphasis on closed- loop systems to promote a circular economy for aluminium, and an increase in awareness of the economic and environmental benefits of recycling aluminium compared with primary production. One such practice is the use of bottom ash from municipal waste incineration, which can be re-smelted and used as a side stream in construction and manufacturing processes, such as car engines.
Also in the automotive sector, the need for lightweighting chassis to improve fuel efficiency and reduce emissions has seen a marked transition away from steel towards aluminium, boosting demand even further.
What challenges should the industry prepare for in 2024?
Jones: For aluminium, primary sourcing is an obstacle that needs overcoming in 2024. In October 2023, ALFED launched an in-depth research report analysing how the UK aluminium supply chain has rapidly adapted to navigate the complexities posed by international conflict, chiefly Russia’s invasion of Ukraine. Increasing pressures from government and industry mean that all materials traded within the UK must have a clear path of origin and do not in any way financially support the Russian state.
The main challenges associated with primary sourcing is encouraging support for domestic production and ensuring the impacts on the wider UK supply chain are minimised. The UK must look ahead to when economic conditions improve, and make preparations for sourcing from new markets not associated with Russian aluminium.
Prosser: Reducing greenhouse gas emissions remains the main challenge for the aluminium industry and will continue to be for the foreseeable future. This will require the development of new technologies and significant investment to roll out changes across the industry.
We’ve also just launched the Aluminium Industry GHG Initiative. With this initiative, IAI commits to track ambition and progress transparently and publicly in greenhouse gas reduction of all its member companies. Already endorsed by thirteen companies, this is a significant step in our quest to reduce emissions. However, as an industry, we must also continue to make progress on other key sustainability issues such as circularity, emissions & waste, water, people, and biodiversity.
While not necessarily a challenge, we should also prepare for changes in secondary aluminium supply, particularly in China, where its use can play a greater role as supply of primary aluminium levels out. Increases in primary aluminium will still be needed globally, though, to meet demand.
Giddings: Over the coming years, a tidal wave of legislative change will hit the packaging industry – much of which has the potential to deliver widespread benefit, but will also require careful consideration and meticulous management to deliver optimum results.
In the short term, we need to be ready to tackle far more volatile challenges. PRN prices, for example, continue to challenge the industry. It’s good to finally see that prices have started to stabilise in 2023, following the unprecedented fluctuations, late data submissions and no end of unnecessary complications experienced during the past 12 months.
Moving forward, more work needs to be done to ensure that the PRN price doesn’t drive material flow, as it arguably has done in recent years. Much like the rest of the industry, we’re hoping for a calm and peaceful 2024 from a PRN perspective!
What advice would you give other companies about creating and nurturing partnerships for long-term success?
Prosser: The key is to identify areas of common interest and shared outcomes. We try to be open to new ideas and consider that others may have a better way to achieve the same outcome or may have ideas that would improve the industry’s response.
It is also important to focus on what the end- use customer is ultimately asking for. In our industry, for example, the end-user is usually not specifically buying the aluminium itself but is actually purchasing the fresh food/drink, medicines, efficiently performing vehicles, or the delivery of renewable energy, all of which are enabled by aluminium.
What three sustainability-related recommendations would you give to businesses for the year ahead?
Jones: Sustainability is receiving increased focus within the aluminium industry as the world looks to reduce emissions and eventually reach net zero. The top priorities for ensuring the future sustainability of the industry should be electricity decarbonisation; direct emissions reduction; and recycling and resource efficiency.
The decarbonisation of heavy industries is high on the agenda in climate talks worldwide, and we are keenly aware that the aluminium industry has work to do to reduce emissions. The quickest and easiest implementation for manufacturers to bring down emissions is by both sourcing renewable energy and electrifying fleets.
Direct greenhouse gas emissions associated with primary aluminium production and smelting is a tougher nut to crack. There are however new greener technologies and processes being pioneered in this space, and industry leaders must be open to adopting these novel and innovative technologies, as well as building energy efficiency measures into production processes, to bring down and eventually abate their carbon emissions.
As an infinitely recyclable material, aluminium provides great opportunities for circular economy business models across the sector. Improving resource efficiency and strengthening side stream use in manufacturing will be the greatest and most economically beneficial way to minimise waste and maximise aluminium resource efficiency.
The introduction of the EU’s Carbon Border Adjustment Mechanism (CBAM) will be a major catalyst for players across the sector to take stock of these processes, and UK aluminium businesses must be ready to report on and reduce their emissions if they wish to remain competitive in the EU.
How could the public perception of aluminium/metal packaging be improved in 2024?
Prosser: We need to continue reducing the carbon footprint of primary aluminium and promote good management and improvement on all other sustainability issues.
Aluminium’s high recycling rates means that 75 per cent of all the aluminium ever produced is still in use today. But if we can further increase recycling that proportion will grow, and we should be willing to promote the industry’s performance.
Equally we must be honest about the challenges the industry still faces and be willing to transparently state our ambition and track our performance on key issues such as carbon footprint.
At COP28, aluminium industry leaders set an ambitious target: achieving near 100 per cent recycling for aluminium beverage cans by 2050. Many of the leading names in the aluminium sector – including producers, recyclers, rolling mills, can makers, and industry associations – endorsed the initiative and pledged to work with all stakeholders to make the goal a reality. This is a good news story and should provide us with the hope and confidence that the aluminium industry is committed to driving circularity and closing the recycling gap.
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