Construction Industry News
To achieve their ambitious targets of a 25% reduction in carbon emissions over the next five to seven year and by 2050 reach net zero status, domestic aluminum players will need to significantly improve their renewable energy or low-carbon energy sources, ICRA said Monday.
Due to the large use of coal in generating electricity in captivity, domestic aluminum manufacturers have adopted the highest carbon intensity at nearly 17-20 tons of CO2e/ton of aluminum, according to ICRA.
Depending on the renewable energy (RE) mix used, this may require significant capital investment of up to USD 5 billion by 2030 and USD 20 billion by 2050, according to an ICRA paper on the primary aluminum business.
Still, organizations may decide to create power purchase agreements to obtain RE power instead of Then carrying out an expense in advance. Still, their cost of producing metal is expected to dramatically increase.
Due to the increasing use of coal, Chinese aluminum manufacturers continue to have high carbon intensity. Yet compared to their Asian counterparts, aluminum companies operating in Western economies have gradually switched to hydropower with an almost 60% lower carbon intensity.
"A significant consumption of RE electricity throughout the value chain would be a necessity to decarbonising primary aluminium operations," said Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA.
