Corporations are subject to greater risks arising from climate change, and consumer demands for environmentally friendly products have increased. Investors are pressuring companies to take environmental, social and governance issues into account in their operations, and policymakers and government organizations are looking at regulating carbon emissions. These trends have led to growing carbon consciousness among corporations.
Atlanta-based Novelis Inc., the aluminum recycling and rolling company that is a subsidiary of Hindalco Industries Ltd., the flagship company of the Aditya Birla Group of Mumbai, India, has increased its focus in this area. The company says it wants to be the world’s leading provider of low-carbon, sustainable aluminum solutions to advance its business and society. Novelis says it recognizes the benefits of a circular economy and is increasing its commitment to use scrap in its production, which reduces the energy needed to produce aluminum and its associated carbon emissions by 95 percent compared with primary aluminum production.
In early January, Novelis announced plans to build a $365 million recycling center next to its automotive finishing plant in Guthrie, Kentucky. With annual casting capacity of 240,000 tons of sheet ingot, the company says it expects the facility to reduce its carbon emissions by more than 1 million tons annually while also allowing it to grow its closed loop recycling programs with North American automotive customers. Additionally, the center will be able to process aluminum from end-of-life vehicles.
Beatriz Landa, vice president of metal procurement and recycling for Novelis North America, says the investment to produce its own recycled-content automotive aluminum ingots will allow Novelis to become “more sustainable and more independent in the market.”
When the investment was announced, Novelis CEO Steve Fisher said, “Through this investment, we will continue to increase the amount of recycled content in our products, reducing our CO2 emissions and moving us closer to carbon neutrality.”
Groundbreaking on the recycling center is scheduled for early 2022, with commissioning expected in 2024.
Closing the loop
The new recycling center will feature advanced shredding and sorting technology and energy-efficient innovations that support Novelis’ sustainability goal to reduce energy intensity by 10 percent by 2026, according to the company.
While Novelis is looking at using renewable energy in its plants and reducing their overall energy use, Landa says scrap is one of Novelis’ “big levers” to decrease its carbon intensity.
The site will use a combination of production scrap that it will secure through closed loop agreements with the original equipment manufacturers (OEMs) that Novelis supplies as well as obsolete scrap.
Landa says Novelis has a closed loop agreement in place with Ford in the U.S. Through that program, Ford recycles and reuses more than 90 percent of the aluminum scrap it generates, which is enough to produce 37,000 F-150 bodies each month.
These closed loop agreements, which she says Novelis began establishing about seven years ago, can entail the addition of sorting technology and conveyors at the company’s stamping plant customers.
They also are a differentiator for Novelis, Landa says. “I think we’re one of two aluminum recyclers that really pushes and has very strong closed loop agreements.”
Incorporating more obsolete scrap
Landa says the flat-rolled aluminum industry loses a great deal of scrap to “the dirtier twitch and zorba that goes into engine blocks and castings. But if we could capture that and bring it back into flat-rolled aluminum, what it allows us is, first, to keep that good clean scrap within the same closed loop but also to reduce the carbon emissions across the industry for which there is a lot of interest, not only from our side but from the OEMs and many of their customers.”
When it comes to obsolete scrap, Landa says Novelis will work to develop innovative sorting technologies for use at the site “that will help us to get all this very odd, very mixed scrap sorted out and cleaned up.” This will allow the company to use the twitch and zorba grades that secondary aluminum producers use.
“We’re looking at a lot of things,” she says of the technologies Novelis is considering for the site. They include readily available technologies such as LIBS, or laser-induced breakdown spectroscopy, and XRT, or X-ray transmission. “And then we’re looking at some other solutions that are pretty innovative,” Landa says, declining to elaborate.
Regarding the company’s scrap sourcing strategy and volumes, Landa says Novelis doesn’t disclose much information on the scrap types it uses, adding, “but we’re pretty much buying all grades. We have a very solid network of scrap suppliers.”
She says Novelis works directly with scrap yards as well as with brokers to secure scrap, though it relies heavily on working with its customers to secure clean production scrap. “It just makes sense,” she says. “It’s much more efficient.”
While the new recycling center will primarily use production scrap, its ratio to that of obsolete scrap is yet to be determined. Landa says, “I don’t want to give fixed numbers because I think this is all very flexible depending on how quickly we can innovate and how things evolve.”
Regardless of the ratio of production scrap to obsolete scrap, Landa says Novelis will increase the percentage of recycled content in its automotive aluminum sheet. “One of the things that this investment will allow us to do is take our recycling content to 61 percent. We started the journey at 33 percent in 2011.”
Novelis also is working to produce other alloys that contain more recycled content, with the company noting that some alloys use 20 percent scrap and 80 percent primary aluminum. The company is working to reverse those ratios, and developing sorting technologies will be key to realizing this goal.
The focus on carbon-emissions reduction is leading automakers to increase production of electric vehicles and to focus on using greener materials and more sustainable practices, Landa says.
“We’re trying to lead the industry,” she says of Novelis. “We’ve been talking about this investment for a while. This is the kind of investment that needs to happen.”
In the North American automotive sector, aluminum demand is strong, Landa says. “We’re basically sold out on the auto side,” she adds. “You’ve got OEMs really betting on aluminum. They are trying to reduce their CO2 emissions and responding to customers who want to go greener.”
A similar trend has emerged for the beverage can sheet that the company produces, Landa says. In addition to the pandemic effects that shifted beverage consumption from bars and restaurants to homes, aluminum beverage cans are benefiting from the backlash against single-use plastics. “We keep seeing that green push, [with consumers] wanting to use packaging that’s sustainable and recyclable.”
Landa says Novelis is looking at further investments in its can sheet production capacity in North America, noting that the can industry relies heavily on coil imports. “It is not terribly efficient,” she says.
Novelis also has seen demand grow for its specialty products, which include the architecture and construction markets.
“There’s a lot of interest in our aluminum products,” Landa adds.
With the increased interest in aluminum and aluminum producers’ increased interest in using scrap as a raw material, Landa says she is concerned about scrap availability. “There are a lot of things that need to happen to make more scrap available and make sure it doesn’t go to landfill,” she says, including improvements to recycling logistics as well as messaging about the importance of recycling aluminum. If the aluminum industry fails to convey that message, she says, “we’re not much better than the single-use plastics [industry].”
Landa adds, “We need to do a better job, especially with can recycling, but just overall. We need to shift our mindset so that we’re more thoughtful with how we take care of our waste and not do the easy route of just throwing it in the garbage.”