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Industry Must Lead on Climate Challenges

April 29, 2021
The seven most energy-intensive sectors must adapt to a new environmentally sustainable path.

Opinion/Analysis

The United States has re-joined the Paris Climate Agreement at a crucial time. Perhaps just in the nick of time. While the climate enemy, much like Covid-19, may be largely invisible, if we fail to beat global warming, the impact on people around the world will be chilling and profound, especially for the most vulnerable. Unlike other historic conflicts, we are all on the same side in this battle. As governments around the world redouble their commitments to address dangerous man-made climate change, industry, too, must step up and play its part.

In World War II, the mobilization of the American economy was a decisive factor in defeating fascism, but through that effort it also reinvigorated swathes of the United States still suffering from the effects of the Great Depression and drove innovation and investment that spurred decades of prosperity.

That same spirit of common endeavour, innovation and international collaboration will be vital when the world comes together later this year in Glasgow, Scotland, for the most important United Nations Climate Change Conference (COP26) yet.

Every nation will have a role, and all sectors of the global economy must play their part. The challenge for some sectors will be huge. The most carbon-polluting – typically those that still burn the greatest amount of fossil fuels – must face up to their responsibilities. 

Where I hope to see the boldest leadership is from the biggest industrial players, especially from the seven most energy-intensive sectors: cement, aluminum, steel, plastics, aviation, shipping, and transport. 

The United Nations has identified these economically important sectors as the world’s most carbon-polluting. Combined, they contribute as much as one-fourth of all global greenhouse gas emissions. And even though they are also “hard to abate” industries, they must adapt to a new environmentally sustainable path if climate targets are to be met. It’s that simple.

The good news is that it can be done. There are sector leaders already transitioning to renewable energy sources. The innovative technologies needed to bring about a clean industry transition have already been developed. 

Take, for example, the aluminum industry. Aluminum isn’t just any metal, it is essential for many low-carbon innovations and it is infinitely recyclable. Its potential has barely been tapped. It will have untold impact in driving new thinking across countless other industries: more environmentally friendly construction and building materials; greener automotive and next-generation EVs; cheaper materials for renewable energy and transporting green electricity right across continents; more efficient global shipping and logistics industries; and cheaper and more sustainable uses in the medical and healthcare sectors. 

While aluminum is one of the cornerstones of the fast emerging low-carbon economy, we cannot overlook that this sector alone contributes over 2% of emissions globally. If the sector were a country, it would emit more carbon than Germany. And despite the impact of COVID-19 on the global economy, the demand for aluminum is set to increase massively. Without significant steps, this will drive up sector emissions by as much as 50%, according to the International Aluminum Institute. For the global industry, Covid-19 offers a clear lesson about the need to address external threats: If we are truly determined to build back better and create a more sustainable future for this essential super lightweight metal, we must take action now, or risk being consigned to history like steamships or the spinning jenny.

There is already a huge difference across the industry in carbon footprint. More than half of aluminum comes from China, where it is heavily dependent on coal, and can have a carbon footprint of up to 18 tons of CO2 equivalent for every ton of aluminum produced. In 2019, U.S. primary aluminum imports accounted for roughly 3.7 million metric tons, or 30% of all imported aluminum. 

But aluminum does not have to be so polluting. Leading producers use renewable energy and ground-breaking technology innovations such as inert anode to reduce direct emissions in primary production. Imagine if aluminum production generated oxygen, rather than carbon, in the smelting process? It could result in not just a carbon neutral, but a carbon negative metal. Today, nearly 25% of global aluminum is now made this way.

But this is not enough. The aluminum industry worldwide must kick its coal dependency and join the age of clean energy.

While low-carbon producers can draw on significant hydropower resources, there is still carbon pollution associated with the actual smelting process, which can and should be addressed. Driving down those residual emissions will require systematic use of benchmarks and profound changes in the way aluminum is made.

There are already encouraging signs of real green innovation gathering pace. That is why the British and Italian governments, as co-hosts of COP26, need to step in and demand more. It is imperative that we unite and commit to a greener future that plans long-term investment driven by science-based targets for tackling climate change – not just short-term profits.

John Kerry was right when he said at the G20 Forum that “all nations must raise ambition together – or we will all fail together.” We need that same commitment from businesses globally to make a real impact. Industry is moving in the right direction on sustainability, but we need greater collaboration and partnership in across the hard-to-abate industries to make that impact happen. 

Or we too will all fail together.

Joan MacNaughton is chair of the international non-profit The Climate Group, and of the advisory board of the New Energy Coalition of Europe. She is also an independent non-executive director of En+ Group, the world’s largest producer of low-carbon aluminum. 

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