Climate matters Our approach to addressing climate change

Transcription

1 Climate matters Our approach to addressing climate change

2 We are part of the solution Contact us: Tel.: Integrating climate change into our business model We take our mission seriously to create a more viable society. This means making climate change an inherent part of how we run our business. Our climate strategy is exactly that a set of priorities to guide our business in addressing this challenge. There are five key points framing this strategy.

3 Climate change is one of the most pressing issues facing mankind. At Hydro, we believe aluminium should be an even greater part of the solution to address this global challenge. Indeed, our climate strategy is now fundamental to our business strategy. The modern world could not exist without aluminium. Its unique properties high strength-to-weight ratio, recyclability, corrosion resistance to name just a few, make so much of modern life possible, from aviation and automobiles to food preservation and printing. But it takes a lot of electricity to produce aluminium initially. The emissions from generating this electricity and from the electrolysis process are key areas of concern for Hydro. From 1990 to 2007, we reduced our specific emissions from the electrolysis process by 57 percent. And we aim to reduce these at least another 15 percent by 2012 from the 2007 level. Our ambition is to strengthen our search for new technologies and more renewable sources of energy that will enable us to reduce these even further Generate more green energy Put the world Make the future recycled Illuminate the solar potential

4 Generate more green energy Put the world Make the future recycled Illuminate the solar potential Generate more green energy Renewable energy is our preferred choice. Over two-thirds of the electricity used in our primary production is already from renewable sources. We intend to increase this and to use our position as the second-largest producer of hydroelectric power in Norway as a platform for finding more renewable sources around the world. Where we must rely on coal in new projects, we will ensure carbon capture solutions can be put in place. Our vision is zero emission production. While this may not be possible today, our next-generation technologies are already moving us toward this goal, increasing production output while reducing energy consumption and recycling energy from the production process. We will reduce our greenhouse gas emissions per tonne of aluminium a further 15 percent by Put the world A car with more aluminium is lighter, meaning fuel savings and lower emissions on the road. An aluminium façade enables lower operating costs and the possibility of energy-neutral buildings. Lighter aluminium products and packaging reduce transport costs and emissions. These are just a few areas where we are working with customers to use aluminium to save energy and reduce emissions. And we are actively searching for even more.

5 Contact us: Tel.: Make the future recycled As one of the world s largest remelters of aluminium, Hydro is proud to push this expertise further by expanding our state-of-the-art recycling facilities and increasing our post-use recycling in the coming years. We are facilitating product design that enables easier recycling through the marking and separation of alloys and working with governments and industry to better communicate and legislate for using aluminium s true climate-saving potential. Illuminate the solar potential The world will need more solar solutions if we are to reduce our reliance on fossil fuels. Our expertise in metals, industrial development and large-scale project management provides a strong platform for our growing solar business, which today spans much of the solar value chain. Our solar ventures extend from raw materials and solar cell technologies to thin-film technology and energygenerating aluminium building components that will help revolutionize the built environment. We will continue to push the boundaries in this arena to ensure our business is future-ready. Essential to a viable society Almost 70 percent of all aluminium ever produced is still in use. Aluminium is a material that can enable society to progress while reducing emissions in the long term. Hydro will continue to strengthen its business by embedding the battle against climate change into its operations and investments. Ultimately, our goal is to build a climate culture across our organization that enables us to reduce emissions at every level of the business and that informs our relationships with customers and partners. Investing in an energy bank Because aluminium can be infinitely recycled without degradation in quality and used for most purposes, it occupies a special place in a world of limited resources. Producing aluminium from recycled metal requires just 5 percent of the energy used to produce aluminium initially, effectively turning it into an energy bank, storing the energy for pay back each time it is reused. Through recycling, aluminium can actually help reduce emissions, a strong advantage over other less future-friendly materials.

6 Generate more green energy Put the world Make the future recycled Illuminate the solar potential Good energy for a beautiful metal

7 Contact us: Tel.: In a world of skyrocketing energy costs and limited resources, the specter of climate change shines a glaring spotlight on high energy consumption, primary aluminium production being no exception. With over a century of experience producing renewable energy, Hydro continues to lead the cause for more energy efficiency in producing this essential material. Energy accounts for roughly a third of the costs in aluminium production. That s no small matter when fossil fuel energy prices are so volatile. As demand for aluminium has increased, so has the pressure on the industry as a whole to be more energy efficient, evident in the 35 percent improvement in energy use since the 1950s. 100 years of waterfalls Hydroelectric power is a renewable resource that, in the context of climate change and the need to reduce our carbon footprint, is an increasingly precious resource. Established in 1905 to harness power from Norway s waterfalls for fertilizer production, Hydro finds itself in a unique position today as the country s second-largest hydroelectric power producer. Our 17 power stations, among them the largest in the country, provide over 9 TWh, contributing to Norway s place in the top 10 hydroelectric power producers in the world. Renewable energy has always been our preferred choice and remains one of the main pillars of our climate strategy, thanks to this industrial heritage. About 67 percent of the electricity consumed in Hydro s primary production worldwide comes from renewable hydroelectric power. We are currently using this expertise in our search to find new sources of hydropower around the world for new aluminium production. Other sources Energy costs more than any other factor determine where in the world a new metal plant can be built. This puts an increasing focus on finding sufficient sources of renewable power for new aluminium production, no mean feat with limited global options. While renewable power will remain our preference, our search for new locations may lead us in some cases to fossil fuels. Where coal is the only option, carbon-capture and storage (CCS) is a must. While this technology is still in development, we will ensure that CCS infrastructure and solutions are possible as part of any new development. The case for aluminium Upstream, our strategy includes reducing emissions from our electrolysis process and limiting our use of fossil fuels to produce aluminium. Downstream, the real benefit of aluminium over other materials is the impact on reducing the carbon footprint of products when they are in use. There can be no greater case for aluminium than this: a material that can be endlessly recycled, used to create lighter vehicles and energy-efficient facades, which in turn, reduce energy consumption, emissions and costs. Qatalum the case for gas Qatalum, a joint venture between Hydro and Qatar Petroleum, will be the largest smelter ever built in one phase. With some of the largest gas reserves in the world, Qatar was an obvious choice, given its significant energy resources. Additionally, the Qatari authorities were keen to broaden their industrial base beyond energy. These two facts enable Qatalum to fulfill goals for both Hydro and Qatar. However, the environmental challenge is a prime concern for Hydro. Our approach has three considerations. First, establishing new aluminium production in the 21st century is only viable close to significant reserves of any type of energy. Second, we have chosen the cleanest fossil fuel, potentially preventing the establishment of another smelter based on coal-fired electricity. Third, we are using the most advanced technologies in the industry at Qatalum, which will drive energy efficiency and reduce emissions from production. As a result, Hydro will be able to keep Qatalum s energy consumption standards better than the rest of our portfolio and well below the global industry average. Subsequent development of Qatalum will seek to incorporate carbon capture and storage technology.

8 Generate more green energy Put the world Make the future recycled Illuminate the solar potential Our vision is zero-emission production. While this may not be possible today, Hydro s commitment to develop technologies that move us in this direction is one of several factors that have made us No. 1 in our industry on the Dow Jones Sustainability Index. While energy accounts for a significant part of the emissions from primary aluminium production, the actual electrolysis process used in smelting is also a source of emissions that must be addressed. Our core focus is on reducing the emissions specific to production (electrolysis), with a goal to create new technologies that reduce emissions per kilo of aluminium produced. Leading the way Hydro has set important precedents to enable the industry to move from the old Søderberg open-pot processes to the prebake technology, a move that dramatically reduces emissions from smelting. We were the first to address the connection between the anode effect (irregularities in the smelting process) and carbon fluoride emissions. With investments of over NOK 200 million in point-feeding technology (a new way to deliver alumina into the smelting cell), we have reduced emissions further. Our plant in Sunndal, Norway now has one of the lowest fluoride emissions in the world, with more than 99.5 percent recovered. Technology to reach our vision We reduced our greenhouse gas emissions (per kg primary aluminium produced) by 57 percent in 15 years (see Fig. 1). But our ambition is greater than this. Technology development will enable us to continue to reduce our emissions per kg produced by another 15 percent by Applying our strengths One of Hydro s strengths noted in The Hydro Way is our continuous search for operational improvements. The application of this institutional talent to our climate strategy has three main dimensions: technology to drive production efficiency, carboncapture readiness and improved work environment. Technology to push us forward Our HAL4e technology in test production at Årdal, Norway, will increase production output while reducing power requirements. As noted in Figure 2, it is another step in Hydro s continual drive to reduce the KWh per kg of aluminium produced. This technology is delivering significant reductions in emissions while also enabling us to become carbon capture and storage (CCS) ready. It is also enabling us to recover and transfer the heat generated from the process for other purposes, further reducing the environmental impact of the production process. Carbon-capture ready While still an emerging technology, carbon capture and storage will provide an important climate impact solution for areas where we still must use fossil fuel energy sources. CCS readiness is also essential for sequestering the emissions from the actual production process. Our HAL4e next generation smelter technology, currently in development, also addresses this important issue. A climate culture Throughout our history, we have nurtured the development of safety culture. We believe this serves as a model for building a climate culture throughout our company from top management to plant floor. It means nurturing a passion for saving energy, building the tools to raise awareness and developing partnerships with those who share our drive to address climate change. By doing so, we will also be able to better tell and live the climate-saving story of aluminium.

9 Contact us: Tel.: Direct greenhouse gas emissions Million tonnes CO2-equivalents (CO2e) Energy consumption (electrolysis) KWh/Kg Aluminium* E Qatalum HAL4e CO 2 CH 4 PFC SF 6 N 2O * Average specific energy consumption from 100%-owned Norwegian smelters Fig. 1 Fig. 2

10 Generate more green energy Put the world Make the future recycled Illuminate the solar potential Putting the world Reducing our energy consumption is one of the most important tools in the fight against climate change. Hydro is leading this charge by helping customers use aluminium to create more energy-efficient products, buildings and vehicles. A car with more aluminium is lighter, meaning fuel savings and lower emissions on the road. An aluminium façade creates lower operating costs and the possibility of energy-neutral buildings. Lighter aluminium product materials reduce transport costs and emissions. These are just three areas that this important part of our climate strategy is making an impact. Automotive components Hydro makes lightweight bumper beams and crash management systems for passenger cars and extrusion-based structural systems for large trucks. In most cases, these systems replace heavier steel. The result: lighter vehicles use less fuel, which means lower carbonrelated emissions. You only need to do the math to see the impact aluminium has. Let s replace 1.7 kg of steel with 1 kg of aluminium and use a conservative assumption that at least 50% of the aluminium will be recycled.* Just by factoring the emission reduction possible from recycling and weight reduction, over 15kg CO2e** per kilogram of aluminium used can be saved over the life time of the car. Now let s look at a real example: assume a Renault Megane production-run of 675,000 cars per year over 6 years, where 7kg of aluminium has been used in the front and rear bumper. Multiply 7kg by 15kg CO2e saved by 675,000 cars by 6 years. The result is a massive reduction of 425,000 tonnes of CO2e, equal to a fuel savings of a staggering 6,900 tanker trucks of gasoline. Multiply this across the entire industry and you begin to see the significant impact that the use of aluminium in cars can have toward addressing the climate challenge. Building systems According to the United Nations Environment Program, buildings account for over a third of the world s greenhouse gas emissions. With such a heavy footprint, the search for solutions to create energy neutral buildings is a vital part of meeting the climate challenge. For Hydro, this is not an aspiration, but a goal already being realized. Aluminium is an essential component in buildings, especially in the exterior skin where PVC is not feasible for load-bearing and steel is too expensive to cast into the multitude of shapes architects are demanding in their quest for new design solutions. Hydro s advanced façade technologies incorporate active, double-skin facades for ventilation and heating, sun-shading devices and other technologies that admit light while blocking heat in summer and allowing the sun s rays in winter for warmth. By lowering energy consumption and managing light into the building, these building components cut emissions from heating, cooling, ventilation and lighting. Here, aluminium s unique properties of formability and strength-to-weight ratio play an important part in energy savings and emission reduction. Our new Technal brand sun-shading device with integrated thin film solar modules moves the building one step closer toward being energy-neutral. Developed in cooperation with Ascent Solar Technologies, one of Hydro s solar energy investments, this energy * In Europe, aluminium enjoys high recycling rates, ranging from 58% in beverage cans to 85% in building and construction and 95% in transportation. Source: European Aluminium Association. ** Carbon dioxide equivalent (CO2e) is an internationally accepted measure expressing the amount of global warming other greenhouse gases (such as methane, fluorocarbons, nitrous oxide, etc) cause in terms of the amount of carbon dioxide (CO2) that would have the same global warming effect.

11 Contact us: Tel.: gene-rating solution provides a key ingredient in creating energy neutral buildings, together with façade technologies that allow more effective energy management of the building and its users. Hydro is already working on the implementation of these technologies, providing the potential for a profound reduction in CO2 emissions from the urban environment. Packaging Our rolled products are used primarily in two types of packaging applications super-thin foils for airtight drinks packaging and thicker stock for aluminium beverage cans. Over the past 15 years, the thickness required for packaging applications has been reduced by more than 33 percent. Lighter materials reduce a product s overall size and weight, meaning less material needed and less energy to make it. Additionally aluminium saves on transportation costs, further reducing fuel costs and emissions. The aluminium beverage can is already the most recycled drink container in the world, with European recovery rates averaging almost 60 percent. This may be admirable, but it is not good enough. This need is driving our efforts to improve this recycling rate wherever we can; the potential of energy savings is only as great as our collective will to recycle! Hydro continues to work with customers to find new areas where aluminium s unique properties can contribute to the battle against climate change as they do in transportation, building and packaging.

12 Generate more green energy Put the world Make the future recycled Illuminate the solar potential A future recycled A viable future will be built with materials that can be endlessly recycled without loss of quality. This is the beauty of aluminium and why it is a responsible way of building that future. All that is needed is the will and infrastructure to make recycling an integral part of how we live and work. Hydro is strengthening its efforts in two key areas: raising awareness and making recycling possible. It takes only 5 percent of the energy initially used to produce aluminium the first time to recycle it again and again and again in perfect condition. Our approach to recycling has three ingredients: strengthening our remelting efforts, increasing our efforts in end-of-life recycling, and helping customers and governments better prepare for recycling. Top of the heap There are two types of recycling: remelting production scrap aluminium left over from the manufacture of aluminium products, and recycling used aluminium, often in the form of what we throw away every day. In both areas, Hydro s metal competence, business foresight and environmental awareness are essential ingredients enabling us to make even more recycling possible. Hydro is already one of the world s largest remelters of aluminium, with a network of nearly 30 facilities worldwide, many dedicated only to remelting. We remelt over 1.2 million tonnes of aluminium per year, with scrap metal from our production and from

13 Contact us: Tel.: other companies, including the recovery of coated and contaminated metal. For example, 30 percent of the remelted metal used by our building systems business is scrap obtained from extrusion and surface treatment plants and from window manufacturers. Our experience in collecting and processing production scrap has not only helped us build stronger customer relationships, but also transferred valuable knowledge that strengthens customer awareness and action toward recycling. From trash to sash The aluminium beverage can is the most recycled drink container in the world, with collection rates as high as 93 percent in Benelux, Scandinavia and Switzerland, and European rates averaging almost 60 percent. But this is far from ideal. Recycling aluminium consumer waste worldwide needs a real boost and is one area where Hydro will be strengthening its efforts over the next five years. Aluminium used with plastic and other packaging materials is more difficult to recycle. So Hydro is developing new technologies such as detection-ejection systems to extract aluminium from mixed material flows and incinerators to improve recovery rates. Making it possible Hydro has taken a strong lead in industry efforts to promote recycling, for example in the European Aluminium Association s Packaging Group. Together with three other companies, we have established more than 20 aluminium packaging recovery and recycling initiatives. Today, 95% of the aluminium in cars is being recycled. Being able to identify materials before and during the recycling process is a fundamental part of making this possible. Hydro s marking program in our automotive business is helping to facilitate the identification of alloys in aluminium components for eventual recycling. A similar program in our building systems business will also make windows and other parts more easily identifiable for aluminium recycling from buildings being demolished, where recovery rates in Europe are already between 92% and 98% according to a recent study by Delft University in the Netherlands.* By helping customers, communities and governments build the infrastructure necessary to enable recycling and to spread the word about aluminium, we are helping take better advantage of its unique properties in the battle against climate change. * Collection of aluminium from buildings in Europe, A study by Delft University of Technology, 2004

14 Generate more green energy Put the world Make the future recycled Illuminate the solar potential Making solar shine

15 Contact us: Tel.: The world will need more solar solutions to reduce our reliance on fossil fuels. But harnessing the power of the sun to fulfill largescale energy demands is no small feat. Hydro is addressing this challenge on several fronts as part of its climate strategy with investments across the entire development chain. Hydro brings three important types of experience to this rapidly developing area: deep expertise in metals from our aluminium business, a century of industrializing new technologies and managing large and complex industrial projects. This experience provides valuable input to our four active solar investments ranging from raw materials and cell development to components and complete systems for solar installations. NorSun NorSun aims to be a world leader in highefficiency solar cells, with a 22 MW facility in Finland and a 185 MW facility in Norway moving toward full capacity in Construction of a 350 MW plant in Singapore is under way with plans to begin production of single-crystal silicon wafers for use in solar cells by Hycore Most solar cells are made of silicon. Extensive materials expertise is required to purify, crystallize and process silicon before solar cells can be made. Our joint venture with Umicore of Belgium is applying that experience to the production of solar-grade silicon for use in solar cells. Ascent Solar Rigid solar panels require relatively large areas and static surfaces. Harnessing the sun s energy from irregular and/or mobile surfaces is a challenge that Ascent Solar Technologies is taking on. They are developing state-ofthe-art, thin-film photovoltaic materials and modules that can be applied to any surface buildings, cars, anything imaginable. A 30 MW second-generation manufacturing plant in Colorado will begin production in 2009 for terrestrial and space applications. Convexa Hydro is also an investor in this Norwegian venture fund concentrating on active investments in new technologies in solar energy. Bringing it all together An exciting development in solar energy components is emerging from the partnership between Ascent Solar and our building systems business in which development of aluminium building components with integrated solar energy capacity is already well under way. The first of these architectural products a brise soleil (permanent shading fixture) product with super-thin, flexible solar energy cells was prototyped in 2007 to great acclaim. The double function of this component reducing the energy needed for cooling through shading as well as generating energy promises a new way of approaching energy management in the built environment. This is significant given that buildings account for over a third of the world s greenhouse gas emissions. We are pushing solar technology even further with more investment and new ideas. Our long-term perspective and commitment to this exciting field will help make large-scale solar energy even more of a reality.

16 Hydro is a Fortune Global 500 supplier of aluminium and aluminium products. Based in Norway, the company employs 23,000 people in 40 countries and has activities on all continents. Rooted in a century of experience in renewable energy production, technology development and progressive partnerships, Hydro is committed to strengthening the viability of the customers and communities we serve. Hydro Drammensveien Oslo Norway Tel: Fax: corporate@hydro.com Design and production: Hydro Photo: Scanpix, PhotoDisc, Helge Hansen, Tony Hall, Jo Michael, Dag Sunnanå Print: Kampen Digital, Oslo Hydro 2009