Aluminum makers call for `green' trademark to sell at a premium

The biggest aluminum producers are discussing the introduction of a “green” trademark for the lightweight metal that could be sold at a premium and encourage carbon footprint reductions among rivals, United Co. Rusal’s deputy chief executive officer said.

“Since many of consumers, such as the car industry, are working on becoming more nature-friendly, the issue of clean aluminum output becomes important," Oleg Mukhamedshin said in an interview last week. As an example, "even if a car with an aluminum body enables lower CO2 emissions, more pollution could have been caused by the company producing that metal, which damages the idea of clean vehicles."

Energy comprises most of the aluminum industry’s costs, and carbon dioxide generated by fossil fuels such as coal makes up almost 60 percent of global greenhouse-gas emissions, according to the U.S. Environmental Protection Agency.

Rusal is not alone with this idea. Rio Tinto Alcan Inc., along with Norsk Hydro ASA and some aluminum consumers including Rexam and Jaguar Land Rover Automotive Plc, set up the Aluminum Stewardship Initiative in 2012 to address industry-specific sustainability challenges, including emissions.

“We are getting more and more interest from customers for low-carbon-footprint aluminum,” Bryan Tucker, a Rio Tinto Alcan spokesman said. “We are already providing this aluminum for a premium for some customers.” About 80 percent of its energy mix is carbon-free, he said.

Norsk Hydro, Europe’s third-biggest aluminum producer, has also seen more interest from its clients in the footprint of its output, spokesman Halvor Molland said. The company had 1.63 metric tons of emissions per ton of aluminum production in 2014 and wants to be carbon-neutral by 2020.

The initiative may be an additional barrier for Chinese aluminum exports into developed countries, said Kirill Chuyko, an analyst at BCS Financial Group. "The green premium can’t be very large -- just several percentage points to the London Metal Exchange price, but it looks like an extra attempt to slow Chinese exports, which became massive this year.”

China accounts for more than 20 percent of greenhouse-gas emissions, according to the U.S. Environmental Protection Agency. While the nation is self-sufficient in aluminum, it boosted exports of the metal this year, creating a market surplus and helping the price to decline 12 percent since the start of 2015.