Most major aluminium producers agree that tackling the carbon intensity of the smelting process is one of the biggest challenges facing their industry.
What they cannot agree on is how to deal with the situation, as a lively panel hosted by Fastmarkets during LME Week at the end of October showed. Aluminium smelting is an energy-intensive business and the market is starting to differentiate between low-carbon metal, powered by hydro, and high-carbon metal powered by fossil fuels, particularly coal. One argument is that if you're producing high-carbon metal, you should reduce your carbon footprint or stop operating altogether, something that will ultimately happen when consumers and governments reject your products. Opponents to this view argue it would mean aluminium production would be limited to places where only hydropower exists, eliminating the ability for countries reliant on fossil fuels - such as China, India and other parts of the developing world - to produce the metal entirely. This will slow not only these countries' growth but also significantly trim aluminium demand there. Both sides are...