‘As an energy and aluminium company Hydro has a great responsibility to respond to the megatrends of our time, such as sustainability, electrification and urbanization’, Hilde Merete Aasheim, President & CEO Norsk Hydro ASA

The green transition is a business opportunity

We often talk about the green transition as something that belongs to the future. But the green transition is happening now and it’s full of opportunities. It’s not about what we have to sacrifice, but rather about new business opportunities that will be both sustainable and profitable.

As an energy and aluminium company Hydro has a great responsibility to respond to the megatrends of our time, such as sustainability, electrification and urbanization. Just as important, we also see great business opportunities in applying our capabilities to match these megatrends.

Therefore, we spent parts of 2020 establishing a new strategic direction toward 2025, building on our profitability and sustainability agenda.

We have a great starting point, with a unique position within renewable energy-based low-carbon aluminium as well as recycled aluminium, and with strong capabilities in renewable energy, built up throughout our 115-year history.  

Based on our capabilities and the megatrends, our strategic direction is based on two pillars: It’s about strengthening our position in low-carbon aluminium while exploring new growth opportunities in areas such as recycling, renewable energy and batteries. 

1. Strengthening our position in low-carbon aluminium

We will strengthen our position in low-carbon aluminium, and we have a good starting point, as 70% of the electricity used in Hydro’s primary production is based on renewable power. We’re sustaining and improving our facilities, ensuring robustness and competitiveness while reducing our climate footprint across the value chain from bauxite, alumina and aluminium production to recycling, aluminium extrusions and solutions.

We reached an encouraging milestone in 2020 by verifying our Karmøy Technology Pilot in Norway, where we produce primary aluminium with 15% lower specific energy consumption compared with the world average and significantly lower greenhouse gas emissions.

Reducing our carbon footprint enables us to further develop our low-carbon aluminium products, and we are seeing promising traction in the market for Hydro REDUXA and Hydro CIRCAL.

2. Diversify and grow in recycling, renewable energy and batteries

As part of our new strategic direction, we will also grow in new areas, including recycling, renewable energy and batteries.

The world needs to produce more for less, making recycling a great potential for us. We will build the capability to double post-consumer scrap volumes through organic and inorganic growth, with several promising projects in the pipeline.

We also want to build on our competence, portfolio and more than 100 years of renewable energy development to become an international renewable energy developer. We aim to go from being an energy off-taker of power to an international renewable energy developer and increase our captive production in wind, solar and hydropower in partnership with others.

We also see potential in the batteries sector. With capabilities and experience in materials, electrochemistry, energy and manufacturing, and a long-term relationship with European automotive producers, we have a unique opportunity to take a lead role in the rapidly growing battery sector.

In 2020 we started construction of a pilot plant for the recycling of electric vehicle batteries, via HydroVolt, a 50/50 joint venture with Swedish Northvolt with a promising future.

With the new strategy toward 2025, Hydro has gone from being one long value chain within the aluminium to now pursuing a strategy built on two pillars: low-carbon aluminium and renewable energy. This is how we will create value going forward.

Leading the way

Based on our DNA as a responsible industrial company for more than a century, Hydro is engaging with a range of international organizations, working to improve industry standards for human rights, transparency and responsible production. We are progressing on our work to strengthen local community relations, communities and business partners through education and empowerment where we operate.

As a global energy and aluminium company, Hydro is committed to leading the way by creating more for less. With a new strategic direction, we embark on the next chapter in Hydro's history of building industries that matter and creating value by taking a lead role in the green transition.