【深度报告】理解和解决铝企业制定科学目标的障碍

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UnderstandingandAddressingtheBarriersforAluminumCompaniestoSetScience-BasedTargets

SummaryofFindingsandRecommendationsJanuary2020

Thisprojectaimedtoestablishafoundationforthedevelopmentoftoolsandguidancetoenable

aluminumcompaniestosetscience-basedtargets(SBTs).Inthisproject,WRIengagedaluminumsector

expertstoidentifychallengestosettingSBTsusingexistingmethodsandrecommendoptionsfor

pursuingrevisedmethods,aswellasnewguidanceandotherresources.

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TableofContents

UnderstandingandAddressingtheBarriersforAluminumCompaniestoSetScience-BasedTargets 1

TableofContents 2

Context 3

ProjectScope 3

ProjectActivities 4

ExistingSBTOptionsfortheAluminumSector 5

Scope3Emissions 6

TheSectoralDecarbonizationApproach(SDA) 7

LimitationsofthecurrentSDAforthealuminumsector 8

Ahomogenoussector? 8

Theweightofelectricity 9

Cradletogate 9

KeyChallengesIdentifiedfortheAluminumSector’sAdoptionofSBTs 10

Emissions-intensivegrowth 10

Recyclinguncertainty 10

IEAmodellingoutputsversusreportedindustrydata 11

Regionaldifferences 12

Processemissions 12

Organizationalboundaries 12

2020editionofIEA’sEnergyTechnologiesPerspectives(ETP)publication 13

KeyRecommendationsandPriorities 13

RevisethecurrentSDAtoincludemissingscope1and2emissions 14

UtilizealternativeSDAsectorapproaches 15

DevelopstrategicSBT‘roadmaps’ 16

CreatemultipliersanddiscountfactorstotheSDA 16

SummaryandPrioritizationofRecommendations 17

AppendixA:KeyThemesfromSanAntonioWorkshop 19

AppendixB:GreenhouseGasWorkingGroupIn-PersonMeetingMinutes 22

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Context

InDecember2015,nearly200countriesadoptedtheParisAgreement,thefirst-everuniversalclimateagreementthatseeksto“strengthentheglobalresponsetothethreatofclimatechangebykeepingaglobaltemperaturerisethiscenturywellbelow2°Celsiusabovepre-industriallevelsandtopursue

effortstolimitthetemperatureincreaseevenfurtherto1.5°Celsius.”In2018,theIntergovernmentalPanelonClimateChange(IPCC)releasedthespecialreportGlobalWarmingof1.5°C(SR1.5),which

providesstrongevidencethatlimitingwarmingbelow1.5°Cwillsignificantlylowerclimateimpactsandhumanitariancriseslinkedtodrought,sealevelrise,flooding,extremeheat,andecosystemcollapse.Tolimitwarmingto1.5°C,theIPCCassertsthatglobalgreenhousegas(GHG)emissionsmustbecutby45%from2010levelsby2030andreachnet-zeroemissionsaround2050(IPCC2018).

Tosupportcorporateeffortstomovetomoresustainablegrowthpatternsandtostaywithinthe

scientifictemperatureguardrailssetbytheIPCC,theScienceBasedTargetsinitiative(SBTi)was

launchedinJune2015.TheSBTidefinesandpromotesbestpracticeinSBTsetting,offersresourcesandguidancetoreducebarrierstoadoption,andindependentlyassessesandapprovescompanies’targets.Forexample,ithascreatedtheSectoralDecarbonizationApproach(SDA),amethodfordevelopingSBTsinthealuminumandotherGHG-intensiveindustries.TheSBTi’soverallaimisthatbytheendof2020,settingSBTswillbestandardbusinesspracticeandcorporationswillplayamajorroleindrivingdownglobalGHGemissions.

AccordingtotheInternationalAluminiumInstitute(IAI),thealuminumsectorcontributesmorethan1gigatonneofcarbondioxideequivalent(GtCO2e)toannualglobalGHGemissions,roughly2%oftotalanthropogenicemissionsglobally.TheInternationalEnergyAgency(IEA)ranksthealuminumsubsectorasthefourth-largestindustrialenergyconsumerandCO2emitter,representing4%(6.2exajoules)of

finalindustrialenergydemandand3%oftotaldirectCO2emissionsfromindustrialsourcesin20141(261millionmetrictonnesofcarbondioxideequivalent,orMtCO2e/year).

Aluminumproductionisparticularlyassociatedwithhighelectricitydemand,whichisresponsibleforapproximately70%oftotalGHGemissionsfromthesector.Infact,thesectoraccountsfor4.7%ofglobalelectricityconsumption(IEA2017)whiletotalenergyuse,onaverage,accountsformorethan40%ofaluminumproductioncosts.2TheGHGpredominantlyemittedintheproductionofprimaryaluminumisCO2,althoughotherGHGswithhighglobalwarmingpotentials(GWP)arealsoemitted.

ProjectScope

Althoughthealuminumindustryisalargeproducerandend-userofenergy,thematerialpropertiesofaluminum—lightweight,durableandhighlyrecyclable—meanthealuminumindustryhasanimportantroletoplayinthetransitiontoalow-carboneconomy.However,ofthe789companiesthathaveeitherapprovedSBTsorhavecommittedtosetSBTs(asofJanuary2020),onlythreearepartofthealuminumindustry:BallCorporation(adownstreamconsumerofrolledproducts),EN+Group(anenergyproducer

1EnergyTechnologyPerspectives2017,IEA

2IPCCAR5TWG3

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withpredominantlyhydro-poweredprimaryaluminumassetsinitsportfolio),andHulamin(aproducerofrolledproducts).3

Torespondtothisreality,thisprojectwasconceivedtoidentifyexistingandperceivedbarriersforthealuminumsector,leadingtogreaterunderstandingofoptionsforsettingSBTsbyaluminumcompanies.Thekeyexpectedoutcomesfortheprojectinclude:

1.Greaterawarenessofthepracticalchallengesfacedbytheglobalaluminumindustryin

limitingGHGemissionsfromthesector;

2.GreaterunderstandingofthefeasibilityofsectoralSBTpathwaysthatinclude(anddon’t

include)theemissionsreductionpotentialfromalongthevaluechain;

3.Recommendedoptionsforfactoringthesechallengesintorevisedmethodsornewtoolsand

guidanceforsettingSBTsintheindustry.

ProjectActivities

Tobuildsupportfortheproject’sfindingsandbuildmomentumforthedevelopmentoffuturetools,

WRIengagednumerousindustrystakeholdersdrawnfromcompanies,industryassociations,NGOs,

researchorganizations,andinter-governmentalorganizations(includingtheIEA).4WRIcollaborated

closelywiththeIAIinparticular,asoneoftheorganization’scoreactivitiesistocollect,analyze,

disseminateandmaintainthebestavailabledatafortheglobalaluminumsector.Infact,theIEAuses

theIAI’sdatatomodelandproducethealuminumsectoroutputsforitsEnergyTechnologyPerspectives(ETP)publication(animportantdetailtonoteforthepurposesandoutcomesofthisproject).

WRIheldthreestakeholderengagementeventsduringthisproject.ThefirstwasakickoffwebinarheldonJanuary9,2019tointroducetheproject.Aninitiallistof288potentialstakeholderswasidentifiedandprovidedbyIAI,andthekickoffwebinarrecorded228registeredparticipants.Followingthe

webinarWRIconvenedathree-hour,in-personworkshoponMarch13,2019inSanAntonio,Texas.

Overtenrepresentativesfromthealuminumsectorattendedandprovidedcriticalinputontheproject.AppendixAsummarizeskeythemesfromtheworkshopdiscussion,whichwereguidedbythefollowingobjectives:

1.Alignonaluminumsector-specificinputsandassumptionsforrefreshingthesectoral

decarbonization(SDA)pathway;

2.ShareopportunitiesandchallengesforsettingSBTsandreducingemissions;

3.Discusswhattools,guidanceandsupportaluminumcompaniesneedtosetSBTs.

WRIconvenedathirdstakeholdereventonSeptember27,2019inCambridge,UKincollaborationwiththeAluminiumStewardshipInitiative’s(ASI)annualStandardsCommitteemeeting.Nearlytwodozenparticipantsattendedtheworkshop,whereWRIsharedpreliminaryresearchresultsincludingarevisedwell-below2°C(WB2C)5climatestabilizationpathwayforthealuminumsector.Participantsatboth

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/companies-taking-action/

4AddAppendixwithStakeholderlist

5Although“well-below2˚C”isnotstrictlydefinedintheParisAgreement,itiscommonlyunderstoodtobeanalogoustotheIPCC’s‘likelychance’terminology,whichisequivalenttoa66%probabilityofkeeping

temperaturerisebelowacertainlimit(inthiscase2˚C).

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workshopsprovidedusefulinputthatultimatelyhelpedinformthisdocument.Ingeneral,themeetingcoveredbrainstorminganddiscussionofSBToptions,aswellastargetedQ&AfromWRItohelpexpandonpreviouslydiscussedideasandtosolicitfeedbackonnewideas.MinutesfromthemeetingwithASIareprovidedinAppendixB.

ExistingSBTOptionsfortheAluminumSector

AsdefinedintheGHGProtocolCorporateAccountingandReportingStandard,scope1emissionsaredirectemissionsfromownedorcontrolledsources,whereasscope2emissionsareindirectemissionsfromthegenerationofpurchasedenergy(WRIandWBCSD2004).

ThecurrentSBTicriteriaandrecommendations(Version4.0,publishedinApril2019)requirescorporatescope1and2targetstobeconsistentwithatleastaWB2Cpathway,withgreatereffortsencouragedtowardlimitingwarmingto1.5°C.Companiesfromthealuminumsectorcurrentlyhavethreemethodsforsettingscope1and2targetswithintheSBTi:

.Absolutecontraction:Reduceabsoluteemissionsbyaminimumof2.5%annuallytokeepglobaltemperatureincreasewithinwell-below2°C,orbyaminimumof4.2%annuallyfora1.5°C

globaltemperaturelimit;

.Activity-basedintensity:Reduceemissionsintensityperphysicalproductionoutputwithaunitthat’srepresentativeofacompany’sportfolio(e.g.,peraluminumcanshipped),which,whentranslatedtoabsoluteemissionsreductionterms,isinlinewiththeminimumabsolute

contractionapproach;

.Sector-based:Theglobalcarbonbudgetisdividedbysectorandemissionreductionsare

allocatedtoindividualcompaniesbasedonthesector’sbudget.Tofacilitatethisapproach,theSBTidevelopedtheSectoralDecarbonizationApproach(SDA).

Forscope3targets,therearefourmethodsavailableforcompanies.6

.Absolutecontraction:Reduceabsoluteemissionsbyaminimumof2.5%annuallytokeepglobaltemperatureincreasewithinwell-below2°C,orbyaminimumof4.2%annuallyfora1.5°C

globaltemperaturelimit;

.Economicintensity:Reduceemissionsintensitypervalueaddedbyatleastanaverageof7%yearonyear;

.Physicalintensity:IntensityreductionsalignedwiththealuminumsectorSDA;ortargetsthatdonotresultinabsoluteemissionsgrowthandleadtolinearannualintensityimprovements

equivalentto2%,ataminimum;

.Supplierengagement:Committohavingaspecificpercentageofsuppliers(asapercentageofspendorGHGemissions)withtheirownSBTswithinfiveyearsfromthedatethecompany’stargetissubmittedtotheSBTiforvalidation.

62°Cistheminimumlevelofambitionforscope3targets;however,companiesareencouragedtopursuegreaterefforttowardawell-below2°C(minimum2.5%annuallinearreduction)ora1.5°Ctrajectory(minimum4.2%

annuallinearreduction).

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Scope3Emissions

Valuechain(scope3)emissionscanbesignificantforbothupstreamanddownstreamaluminum

companies.For“pureplay”aluminumproducers,forexample,downstreamscope3emissionsfrom

Category10–ProcessingofSoldProducts7(e.g.transformationofonetonneofaluminuminto

componentsfortheaviationsector)areoftenasignificantsourceofemissions.Forallfabricatorsof

aluminumend-useproducts,theupstreamscope3emissionsfromCategory1–PurchasedGoodsandServices8(transformationofminedbauxiteintoonetonneofaluminum)areoftentimesmoresignificantthanthecombinedscope1and2emissionsfromtheirownoperations.Figure1describesthe15scope3categoriesasdefinedbytheGHGProtocolCorporateValueChain(Scope3)AccountingandReporting

Standard.

Figure1:GHGProtocolScope3EmissionsCategories

Whilecompaniesofallstripesfacenumerousbarrierstoaccountingforandaddressingscope3

emissions(e.g.collectingdatafromsuppliers),theseemissionsalsopresentcompanieswithpotentialmitigationopportunitieswhensettingSBTs(e.g.increasedpurchasingfromcarbon-friendlysuppliers).

Forallcompanies,thecurrentSBTicriteriaandrecommendations(Version4.0,publishedinApril2019)requirethesubmissionofascope3targetwhenacompany’srelevantscope3emissionsare40%or

moreoftotalscope1,2and3emissions.Oncethis40%thresholdhasbeenreached,companiesmustsetoneormoreemissionreductiontargetsand/orsupplierorcustomerengagementtargetsthat

collectivelycoveratleasttwo-thirdsoftotalscope3emissionsinconformancewiththeGHGProtocolScope3Standard.

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/standards/scope-3-standard

8Ibid

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TheSectoralDecarbonizationApproach(SDA)

TheSDAisascientifically-informedmethodforcompaniestosetGHGreductiontargets.The

methodologyisintendedtohelpcompaniesinhomogenous,energy-intensivesectorswithwell-definedactivityandphysicalintensitydatatoaligntheiremissionsreductiontargetswithaglobalWB2C

pathway.9

ThecurrentSDAmethodprovidesthebasisfortheonlyexisting,sector-specificmethodforsettingSBTsinthealuminumsector.TheSDA’sWB2Cscenarioisbasedonamodeled“Beyond2°C”(B2DS)scenariofromthe2017ETP,10wheretechnologyimprovementsanddeploymentarepushedtotheirmaximumpracticablelimitsacrosstheenergysysteminordertoachievenet-zeroemissionsby2060andtostaynetzeroorbelowthereafter,withoutrequiringunforeseentechnologybreakthroughsorlimiting

economicgrowth.This“technologypush”approachresultsincumulativeemissionsfromtheenergysectorofaround750GtCO2between2015and2100,whichisconsistentwitha50%chanceoflimitingaveragefuturetemperatureincreasesto1.75°C.1112Thealuminumsector’scumulativecarbonbudgetoverthissametimeframehasbeenestimatedtobeapproximately11GtCO2(scope1only),orroughly1%oftheglobalcarbonbudget.

TheIEA’sB2DSscenariolaysoutanenergysystempathwayandaCO2emissionstrajectoryconsistentwithatleasta66%probabilityofkeepingtemperaturerisebelow2˚Cby2100.Underthispathway,theenergyintensityofaluminumproduction(assuminga2010gridmix)mustfallby7%between2010and2025,13andsteeperreductionsarerequiredoverthelongterm.Ultimately,thepathwayimpliesthe

needforlargereductionsinemissionsintensitybetween2010and2050,specifically:direct(scope1)emissionsintensitymustfall88%,whilescope2emissionsintensitymustfall96%.14

Figure2showsthesector’sSDApathwayoutputs(2014–2060)forprimaryaluminum(secondaryexcluded)basedonIEA’sB2DCscenarioandindexedtoproduction.

9TheSBTicurrentlyisintheearlyphasesofdevelopinga1.5°CalignedpathwayforincorporationintotheSDA.10

/reports/energy-technology-perspectives-2017

11Incontrast,theIEA’s20172°Cscenarioestimatesanoverallcarbonbudgetof1,170GtCO2from2015-2100.12

/wp-content/uploads/2019/04/foundations-of-SBT-setting.pdf

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/etp/etp2016/

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/wp-content/uploads/2015/05/Sectoral-Decarbonization-Approach-Report.pdf

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Figure2:IndexedSDApathwayoutputsforprimaryaluminum(2014-2060)

Indexedsector-specificdata(2014baseyear)

Sectoraldata(ETP2017|B2DS)

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

-0.2

activitypowerconsumptionscopeemissionsintensityscopeemissionsintensity

Sector

Sector

Sector2

Sector

1

20142024203420442054

TheSDAmethodtakessectoraldifferencesandabatementpotentialsintoaccount,whichare

consideredinthemakingofthedifferentsectorscope1scenarios.TheSDAmodelalsoincludesscope2scenariosbasedonasharedpowergenerationpathwayforeachscenariooutcome(e.g.1.5˚C).Thesescenarioscanalsobeusedtosetvalidscope3targets,totheextentthatcertainactivitypathways

correspondtoscope3categoriesortheemissionssourcesofacompany’sscope3inventory.For

example,wherecertainscope3categoriesconsistmainlyofpurchasedelectricityemissions,the

relevantSDApowergenerationpathwaycanbeusedtomodelreductiontargets.Forhomogeneous

sectors,theSDAmethodalsoaccommodatesdifferentiatedlevelsofhistoricalaction,asitrequiresGHGemissions-intensivecompaniestoreducetheiremissionsfasterthanthesectoralaverage;conversely,companieswithrelativelylowinitialemissionsintensitiesmayreducetheiremissionsmoreslowly.15

LimitationsofthecurrentSDAforthealuminumsector

CompaniesfromthealuminumsectorhaveexpressedincreasinginterestinusingtheSDAoranothersector-specificintensity-basedapproachtosetSBTsanddemonstratetheircommitmenttotransitiontoalow-carbonfuture.However,companieshavealsoidentifiedandexpressedconcernsaboutthemodelingassumptionsusedtoproducetheSDA’sbenchmarkpathway.

Ahomogenoussector?

Ingeneral,aphysicalindicatorthatrepresentsasector’sprimaryoutput(e.g.onetonneofaluminum)isahelpfulwaytocomparetheemissionsintensityofsimilarcompanieswithinthesamehomogenoussector,andthustheindividuallevelofeffortneededtoconvergetoanoptimallevelofemissionsperunit

ofproduct.Toproduceausefulmetric,however,theunderlyingdatausedtomeasureacompany’semissionsimpactideallyshouldbealignedwiththedatausedtomodelthesector’semissionsimpact(e.g.totalconsumptionofelectricity).

Onecleartakeawayfromstakeholdersinvolvedduringthisprojectisthatwhilstthesectorisgenerallydefinedashomogenous,manycompaniesinthealuminumindustryproduceawidearrayofproductsthatoftentimescannotbecapturedinasinglephysicalindicator.Similarly—butnotuniquetothe

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aluminumsectorperse—theorganizationalboundariesthatdefineacompany’sGHGemissionsprofilecanoftendiffer,furthercomplicatingperceptionsofanunlevelplayingfieldbysome.Althoughthisis

notthecaseforeverystakeholder,thediversitythatexistsacrossthealuminumsector’svaluechainhasnonethelesspresentedcomplicationsforbothupstreamanddownstreamactorsinterestedinusingtheSDAtohelpdefinetheirSBT.

Theweightofelectricity

Electricityisasignificantinputtothealuminumproductionprocess,andvariationsintheelectricitymixofglobalaluminumproducersistheprimary(butnotonly)distinctionamongtheGHGemissions

intensity(tCO2e/tAl)ofanaluminumproducer’sfinalsoldproducts.Accordingtoa2011studybytheCarbonTrustthismetriccanvaryconsiderably,fromaslittleas1tCO2e/tAlofrecycledaluminum,to3tCO2e/tAlforbestavailabletechnology(BAT)smelterspoweredbyrenewableelectricity,andupto20tCO2e/tAlforlessmoderntechnologypoweredbycoal-basedelectricity.16

Furthermore,duetothealuminumsector’sconsiderableutilizationofcaptiveordirectlydelivered

powersupplies,thesourceofelectricityactuallyused(andthecorrespondingemissionfactors)can

significantlydifferfromthenationalorregionalgridmixesusedintheIEA’sETPmodelling.17And

becausemanyproducersofaluminumgeneratetheirownelectricity,theprofileoftheirscope1and2emissionsmaydifferconsiderablyfromthoseoftheirpeers,potentiallylimitingtheusefulnessofthealuminumpathwayresultsfromtheSDAmodel.

Cradletogate

Theupstreamsegmentofthealuminummarketconsistsoftheproductionofprimaryaluminum(and

alloys),includingtheentirerawmaterialsupplychainandprocessesthatprecedeitsproduction.The

downstreamsectorismadeupofthousandsofproducersofsemi-finishedandfinishedaluminum

products,aswellasproducersofrecycledaluminumfromprocessedmaterial.Ofconcernformany

downstreamaluminumstakeholdersistheSDA’scoverageofsectoremissionsandactivities,whichis

currentlylimitedtothe“cradle-to-gate”upstreamenergyemissionsfromtransformingbauxiteinto

alumina,anodeproduction,aluminumsmelting(electrolysis)andingotcasting.ThecurrentIEAmodelincludesbothproductionofprimaryaluminumfromaluminaandsecondaryaluminumproduction(fromrecycledmaterials)andofaluminumalloys.Admittedlytheseactivitiesrepresentthelion’sshareof

emissionsfromthesector,buttheabsenceofarelevantpathwayforthedownstreamsegment—beyondtheirupstreamscope3emissions—ostensiblyclosesthedoorforasignificantnumberofpotentialSBTsettersfromtheindustry.18

Onarelatednote,thescope2emissionspathwayresultsfordifferentactorsalongthevaluechainisnotaccountedforinthecurrentSDA.Forexample,thescope2emissionsofadownstreamfabricatorof

aluminumproductsarelikelytobevastlydifferentthanthoseofapure-playproducerofaluminum,and

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/media/38366/ctc790-international-carbon-flows_-aluminium.pdf

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/media/filer_public/2018/02/19/lca_report_2015_final_26_june_2017.pdf

18Onaverage72%ofGHGemissionsfromprimaryproductionofaluminumarefromelectricitywiththeremainderfromthermalcombustionoffossilfuelsandprocessemissions.

/media/38366/ctc790

-international-carbon-flows_-aluminium.pdf

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thustheSDA’sassumptionofintensityconvergencewouldbeparticularlyinappropriateforthefabricator.

KeyChallengesIdentifiedfortheAluminumSector’sAdoptionofSBTs

Basedondiscussionswithstakeholdersduringthewebinars,workshopsandindividualconversations,therearearangeofchallengesastowhythealuminumsectorhasbeenslowtocommittosettingSBTs.Someofthesechallengesarenotuniquetothealuminumsectoranditscompanies(e.g.organic

growth),butseveralchallengesdodemonstrateaneedtomovebeyondaone-size-fits-allapproachfor

thesector.

Mirroringtheoperationaldiversitythatcharacterizesthealuminumindustry,thereisawiderangeofperceivedobstaclesforparticipationamongindividualstakeholders,including:

Emissions-intensivegrowth

Ledbytheeconomicgrowthofemergingeconomies,thesectorestimatesthatby2030itwillproduce90milliontonnesofprimaryaluminum(MTAl),comparedto60MTAltoday.19Givenabusiness-as-

usualscenariobasedoncurrentmacroeconomictrends,thesectorprojectstheproductionofthe

additional30MTAltobesuppliedmostlybyChinaandSouthEastAsia(bothpoweredmostlybycoal-basedelectricity)andtheMiddleEast(poweredbynaturalgas),withtheresultthatfossilfuelscouldpoweranevenhigherpercentageofglobalsmelterproduction(currentlyabout60%).20Intheabsenceofsupportforlow-carbonaluminumfromthepublicandprivatesectors,thisrealityisaparticularly

vexingproblemwithrespecttothesector’scontributiontoclimatechange.

Recyclinguncertainty

Greaterrecyclingbytheindustrytoproducemoresecondaryaluminumisoftencitedasoneofthe

primarywaystoreduceGHGemissionsfromthealuminumsector.Indeedthisistrue,butsectorexperts(e.g.IAI,etal)haveindicatedthereislimitedavailabilityofend-of-lifescrapmetalforcollection(a

functionoflongproductlifetimes,growingdemand,andashiftfromcasttowroughtapplications,

particularlyintheautomotivesector)andincreasingcompetitionforhighquality,well-sortedand

valuablenewscrap(again,particularlyfromtheautosector).21Figure3illustratestheannualdemandamongdifferentsectorsforsemi-fabricatedaluminumproducts(e.g.extrudedaluminum).In2018,forexample,54%oftotaldemandforaluminumwasdominatedbytwosectorsthatproduceproductswithlonglifetimes:Transport(28.4MtAl)andBuilding&Construction(24.8MtAl).

19InternationalAluminumInstitute,

/

20InternationalAluminumInstitute,

/

21EnergyTechnologyPerspectives2017,IEA

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Figure3:Sectordemandforsemi-fabricatedproducts

180

160

Milliontonnes

140

120

100

80

60

40

20

0

Other

ConsumerDurables

Machinery&EquipmentElectrical

Packaging

Building&ConstructionTransport

200020052010201520202025203020352040Source:IAI

IEAmodellingoutputsversusreportedindustrydata

TheIEA’sETPscenariosareproducedusingmodelsthataccountforindustrialenergyconsumption

separatelyfromtheproductionofelectricity.However,becausealuminumsmeltersareoftenco-locatedwithaluminumindustry-operatedpowergenerationfacilities,electricityproductionandconsumption

areintertwinedforasubstantialportionofthesector.Despiteaconsiderableamountofdesktop

researchandcollaborationwithindustryexperts(mostnotablyIAI),thediscrepancybetweentheIEA’selectricityconsumptionfiguresforthesectorandthoseoftheIAI’sremainsunclear.Predictably,the

correspondingdifferencesinscope2emissionsestimatesfromIEAandIAIforelectricityusebythe

sectorareconsiderable(35%).Table1showsthediscrepanciesinscope1emissionsestimatesbetweentheIEAandtheIAI(47%)andthetotalpercentagedifferenceforallGHGemissions(39%).Ofequal

concernisthedifferencebetweenIEA’stotalreportedproductionofprimaryandsecondaryaluminum(126MTAlin2014)versusthoseoftheIAI(80MTin2014).ThedifferencebetweenthesenumbersisnotfullyaccountedforbytheIEA,sowingconfusionabouttheresultsofitsanalysisforthesectoranditsappropriatenessformodellingcorporatetargetsusingtheSDA.

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Table1:ModellingImplicationsofDifferingDataEstimates

SOURCE

SCOPE1EMISSIONS

(2018)

SCOPE2EMISSIONS

(2018)

TOTAL2018EMISSIONS(SCOPE1AND2)

IEAETP2017

273MTCO2e

500MTCO2e

773MTCO2e

IAI2018

401MTCO2e

676MTCO2e

1,077MTCO2e

Differencebetweenestimations(%)

47%

35%

39%

Regionaldifferences

ThecurrentversionoftheSDAmethodintrinsicallyaccountsforregionaldifferencesregardinglevelofactivityandcarbonintensity,butnotexplicitlyinrelationtoregionalresources.Strongregional

variationsexistforthepowersectorglobally,however,under