Consumers are increasingly looking at the full value chain of materials with an ESG lens and governments are looking broadly across industries to meet global commitments. The reduction of emissions in alumina refining will be expected, with failure to act potentially penalised.

While smelting produces a large proportion of carbon emissions and is often the focus of decarbonisation efforts, alumina refining is still an energy intensive process. It uses high pressure steam to produce the heat input required to process bauxite into alumina. It also uses fossil fuels in its calcination processes. Alumina is then converted to aluminium in a smelting process, which releases a large amount of carbon.

The Scale of the Problem

Aluminium can have a carbon emission intensity with an industry average of ~11.5 metric tonnes of CO₂ per tonne of aluminium (Scope 1+2). This ranges from <5tCO2/tAl—for production utilising hydropower as an energy source—up to a more typical ~15-20tCO2/tAl if utilising coal power. Alumina refining by comparison has a typical carbon emission intensity of 1.5MtCO2/per tonne of alumina. However, with alumina production forecast to continue growing to 160Mtpa by 2030, the sector will remain a significant polluter without changes.

The opportunity for reduction of emissions in the refining industry varies. In Australia, the second largest producer and largest exporter of smelter grade alumina, the refining industry accounts for around 24% of the country’s Scope 1 manufacturing carbon emissions (~14Mtpa).

A World of Opportunity

The primary source of carbon emissions at an alumina refinery is the boilerhouse, where steam is produced for the process. This accounts for an estimated 70% of fossil fuel consumption at a refinery, with the remainder predominately coming from the calcination process (~24%) which requires temperatures of over 1000°C to strip chemically bonded water from alumina hydrate. Initiatives being implemented and explored to reduce carbon emissions have been outlined by major producer Alcoa’s proposal for the ‘Refinery of the Future.’ They include:

Fuel Conversion – a fuel switch is a key enabler for several refineries in meeting increasingly prevalent sustainability ambitions across the industry. A common action, already being implemented, has been the replacement of fuel oil with natural gas. While not eliminating carbon emissions, this conversion does significantly reduce a site’s emissions.

Norsk Hydro’s Alunorte is converting their calcination process and some steam generation from fuel oil to natural gas. This is expected to reduce the refinery’s CO2 emissions by 700ktpa. To eliminate carbon emissions, at least initially from the calcination process, Rio Tinto is studying the potential use of hydrogen to replace fossil fuels.

Mechanical Vapour Recompression (MVR) – MVR is considered a potential replacement for fossil-fuel consuming boilers to produce steam. Electricity produced from renewable sources would be used to power compressors to turn waste vapour into the steam used to provide refinery process heat.

Alone, MVR has the potential to reduce a refinery’s footprint by 70% and reduce water usage by 35%. MVR  has been proposed by Alcoa, which mostly operates low-temperature refining processes for low silica gibbsitic bauxite. MVR’s effectiveness at high temperature plants processing boehmite bauxites remains to be seen.

Electric Boilers – Alunorte has recently installed an electric boiler for supplying its process and offsetting coal usage in the boilerhouse—reducing 100ktpa of CO2 emissions. The boiler is to operate with energy purchased from the market. Investments in renewable energy and long-term purchase agreements will assist with the plant’s emission reduction efforts through the installation.

Electric Calcination – Electric calcination directly replaces traditional direct-fired calcination plants. Fossil-fuels currently power calcination plants, but can be replaced by renewables in an electric calciner. Electric calcination also allows steam to be captured and reused, reducing water wastage. In conjunction with MVR, it has been suggested carbon emissions from a refinery could be reduced by 98% and water usage by 70%. Further, incorporation of a thermal storage system enables the refinery to act like a battery to help support stabilisation of the electricity grid.

Residue Disposal – whilst not reducing carbon emissions, innovative solutions for management of the significant volumes of bauxite residue produced by the process is also being investigated. Measures include residue filtration and reducing water content—and returning water to the process—allowing easier handling and more efficient storage.   There has also been investment in research to repurpose residue to commercially marketable products.

Investigations and studies into these potential solutions have already started being announced, particularly in Australia where industry majors Alcoa and Rio Tinto operate significant capacity.

In May 2021, Alcoa received $11.3m from the Australian Renewable Energy Agency (ARENA) to demonstrate technology that can electrify the production of steam utilising renewable energy—MVR—at its West Australian refineries, starting with Wagerup.

In June 2021, Rio Tinto received an ARENA grant for a feasibility study into its hydrogen conversion of calcination at its 3.4Mtpa Yarwun refinery in Queensland. The company is also investigating the development of a hydrogen pilot plant at the site in a JV with Sumitomo.

Walking the Walk Ain’t Cheap

Currently, the ‘greenest’ alumina refineries utilise natural gas in both the boilerhouse and the calcination operations and utilise dry stacking of residues to minimise footprint and water usage.

Significant capital will need to be invested to bring down carbon emissions at alumina refineries. Traditionally, all sites have a boilerhouse to raise steam and burn fossil fuels to do so. Conversions from fuel oil to natural gas have been undertaken, though generally to save money rather than to actively reduce emissions.

The reduction in associated carbon emissions is increasingly being highlighted as a driver of these initiatives. Adapting all six Australian refineries to replace steam raising with MVR has been estimated to cost US$2-5bn and will require 1,200MW of renewable power to operate—and this is assuming the technology is successfully proven.

Norsk Hydro’s project to convert its Alunorte plant from fuel oil to natural gas has been connected to a US$200m ‘sustainability-linked loan.’ The pricing of the loan is linked to the company’s greenhouse gas emission reductions. This could be an emerging theme used to incentivise emission reduction to secure financing as financial institutions look to reduce their own exposure to carbon intensive projects. Norsk has also invested US$8.3m in its electric boiler installation at Alunorte with plans for two more by 2024.

The capital costs associated with undertaking these projects are often not contributing to additional production, raising the cash cost floor of sites. However, costs may arise for producers not trying to reduce emissions. The European Union has flagged carbon border tariffs which would impose a cost on failure to act. In many cases, change may need to be induced by government incentive or other constraints.

A Drop in the Ocean?

These projects are largely occurring in Western countries. However, China is the largest producer of aluminium—accounting for ~51% of global production—and efforts will need to be made in China to meaningfully reduce emissions across the sector.

Chinese refineries are typically heavily reliant on coal as a fuel, both in the boilerhouse and calcination—with estimates of over 80% of capacity reliant on coal.  As such, carbon reduction projects outside China may not contribute meaningfully to overall reduction in the sector. The country’s energy efficiency and provincial consumption targets—if persisted with or tightened—may see an uptake of modifications which could lead to lower emissions from the domestic sector.

However, the question may be whether China’s domestic consumers—the downstream market for its refineries—are worried about ‘greening’ supply lines without being compelled to by its government. A lack of incentive may see a very slow uptake of the greener production methods.

Across the aluminium value chain of mining, alumina refining and aluminium smelting, the contribution of mining to total emissions is negligible and refining accounts for less than 20%. The major gains to reduce emissions across the industry remains within the smelting sector. This does not mean that it is not worth pursuing emission reductions in the alumina sector, and there are several avenues which can potentially be pursued.