Aluminium plant with sheets of aluminium
Energy insightsDecarbonising the aluminium sector

Decarbonising the aluminium sector

1 May 2024 | 5 minutes

With its widespread use in products and technologies that are essential for decarbonising industries, aluminium is of key importance. Ulf Nahrath, VP of Energy Transition & Infrastructure at Shell, takes a closer look at both the challenges and opportunities for the industry in this Q&A.

Future decarbonisation solutions for high energy users like aluminium production and manufacturing have been a major topic of discussion over the past few years. How have technologies evolved during this time?

As companies face increasing pressure to demonstrate their progress towards reaching net-zero goals,1 we’re seeing businesses moving from ambition to action when it comes to decarbonisation. Many businesses already have a firm net-zero strategy in place2 and are now driving these plans forward to minimise operational emissions – from kick-starting energy efficiency projects and procuring renewable energy to electrifying vehicle fleets.3 However, many energy intensive industries (EIIs), such as aluminium producers, recognise that reduction and efficiency alone simply aren’t enough to tackle hard-to-abate emissions.4 As such, companies from across the supply chain are progressing feasibility studies to understand the other options available.5 This includes everything from on-site generation and battery storage, to using carbon capture and storage (CCS) and exploring the potential of hydrogen turbines. As a result, investment into these areas continues to grow and technologies are developing quickly. Turbine manufacturers have begun certifying their products for use with hydrogen;6 on-site solar generation costs continue to fall due to wider availability and a more competitive marketplace;7 electrolysers for creating green hydrogen are evolving fast;8 and the logistics around CCS are starting to take shape.9 With first investments in these technologies taking place in Europe now, future decarbonisation solutions will soon become more accessible for an increasing number of businesses.10

Are there any barriers hindering technological innovation in that space? Will cost be a prohibitive factor to reaching mass scale, and what can be done to overcome this

Thanks to investments, technological innovation is developing and costs in many areas are decreasing. Low carbon technologies still need government support to facilitate market readiness but there isn’t an endless pot of money. While accelerating progress towards decarbonisation must remain an organisational priority for energy intensive businesses, there is a financial balancing act to play. It’s therefore essential to look into the economics, technology readiness and risks, as well as how these align with the company’s strategy, to enable an effective review of which decarbonisation pathways are most suitable. When it comes to long-term decarbonisation solutions, cost is one of the most critical factors impacting the viability of mass scalability. Technologies such as hydrogen11 and CCS12 are indeed progressing, but the supporting infrastructure needed to achieve widespread adoption in sectors like aluminium production requires extensive investment.13

In your opinion, what is the main challenge that the aluminium industry must face when looking at a realistic decarbonisation plan? How can this be overcome?

Aluminium is critical material for the transition to a green economy, with widespread use in products and technologies that are essential for decarbonising energy, transport and other high-emitting industries. For example, aluminium makes up an integral part of EV manufacture14 and is a key material in the construction of wind turbines.15 A key challenge for the industry is rooted in its incredibly complex supply chains. With the material having such wide application, complex supply networks result in very high direct and indirect emissions.16 Ultimately, there is no silver-bullet solution in decarbonising the industry. After all, there are so many unique businesses – from smelters and stampers to rollers, extruders and remanufacturers – each of which face different challenges when it comes to embracing net-zero and all seeking solutions with the required size and scale to make an impact. Players across the entire supply chain must therefore analyse all possibilities and spread time and capital investments accordingly.17

What options does the UK aluminium industry have now and in the near future for decarbonisation?

There are a number of solutions that can be adopted right now that have the potential to accelerate decarbonisation progress. These include embracing electrification, investing in power purchase agreements (PPAs), adopting biofuels and switching to renewable energy contracts.18 In the medium term (7-20 years), the emerging opportunities for replacing gas include CCS – which offers the potential to ‘filter out’ flue CO2 emissions – and hydrogen firing in turbines or fuel cells. It’s important to note, however, that the infrastructure for both CCS and hydrogen is still in its infancy, which means that pipeline infrastructure for hydrogen and further investment into CO2 stores is needed to really maximise progress.19

It’s clear to see that hydrogen has a major role to play in the future energy system – especially for large industrial businesses that are heavily dependent on gas, such as aluminium manufacturers.20 It’s a complex area that requires significant infrastructure developments, but one that offers the long-term potential to tackle hard to abate emissions.21 Companies looking to plan out medium to long-term decarbonisation strategies should start by establishing a dedicated decarbonisation team, whose first priority is to understand the current CO2 emissions baseline from which formulate targets and assess progress. Defining and assessing options for reaching these targets can be done through a number of assessment lenses, that is, mapping out and modelling options systematically across various contexts such as the regulatory environment, economic feasibility, technical aspects, and the wider company strategy. Comparing and contrasting all options through multiple lenses will allow the team to assess optimum routes to decarbonisation and define a strategy roadmap for reaching the company’s targets.

Where is Shell Energy in the race to market readiness when it comes to these future-facing solutions?

Both in the UK and around the world, we continue to invest in decarbonisation technologies, such as blue and green hydrogen,22 wind, solar, biofuels and CCS.23 We are building Europe’s largest hydrogen electrolyser24 and currently have many large-scale wind and solar sites in operation. Through our Recharge division, we are also deploying wide-reaching EV charging networks to provide a solution for net-zero road transportation.25

Shell Energy is well positioned to be a key player in global decarbonisation. We have extensive insights into the energy value chain and continue to accelerate our focus on the next generation of low carbon technologies.

What steps is Shell taking to decarbonise? What has this taught you, what have you learnt that can be used when looking at decarbonising the aluminium industry?

At Shell Energy, we're working with customers to help reduce their scope 2 emissions by collaborating on onsite energy solutions, efficiency measures and providing long-term renewable energy options such as Power Purchase Agreements (PPAs) to businesses across the UK and Europe. This aligns with Shell’s energy transition strategy26 which is aimed at delivering more value with fewer emissions across all Shell businesses. A key lesson that can be applied to the aluminium industry is that of value addition. Our focus on performance, discipline and simplification drives choices about where and how we can create the most value from decarbonisation. Most importantly, individual businesses in different geographies and in various points in the value chain will operate within their own unique contexts. There is no silver bullet solution, so it is essential that aluminium companies assess their own requirements and opportunities for adding value through scenario planning and collaboration as they map out their own journey towards decarbonisation.

View our online content disclaimer.

1 2,A%20survey%20of%20more%20than%201%2C000%20businesses%20globally%2C%20including%20more,zero%20carbon%20goals%20in%20plac 3 4 5 6 7 8 9 10 11 12,jobs%20and%20supporting%20net%20zero.&text=Green%20boost%20for%20the%20UK,Carbon%20Capture%2C%20Usage%20and%20Storage. 13 14,for%20both%20manufacturers%20and%20consumers. 15 16 17 18 19 20's,of%20aluminium%20during%20the%20test. 21 22 23 24's%20largest%20renewable%20hydrogen%20plant,-6%20Jul%202022&text=Shell%20Nederland%20B.V.%20and%20Shell,plant%20once%20operational%20in%202025. 25 26

Related articles

Wind turbines image
01 Jan 202410 minutes
There has been increasing emphasis around the significance of power purchase agreements, or PPAs, in recent years. But what are they and how can they help businesses meet their electricity needs and progress their decarbonisation goals. Leah Timmins, Senior Originator at Shell Energy, explains more.
Read more
Colleagues discussing packaging
01 Mar 20245 minutes
Find out more from Jodie Eaton, Shell Energy UK's CEO, as she examines the complexities of decarbonising the diverse packaging sector.
Read more
Meeting with colleagues in an office
Energy explained
14 Feb 20245 minutes
The right procurement strategy can help you to manage energy costs and minimise risk. Here we look at some of the best ways to navigate this potentially complex area and get the most value from your business energy spend.
Read more

Speak to our energy experts

We're here to help