Conference Agenda

There is increasing expectation and scrutiny from the public, customers and stakeholders on the aluminium industry’s progress in meeting global climate change targets. The International Aluminium Institute (IAI) has previously outlined the trajectories and technology pathways that the industry would need to follow to be consistent with global Beyond 2 Degrees (B2DS) or 1.5 Degree (1.5DS) scenarios. These trajectories took 2018 as the base year and the most recent comprehensive global data – for 2022 – shows that the aluminium industry has reduced emissions below Business as Usual (BAU) but is not yet aligned with either the B2DS or 1.5DS scenarios. However, the data also reveals that, for the first time, global aluminium industry greenhouse gas emissions did not increase in 2021 and 2022, despite production increasing. This can be attributed to the significant number of projects in the industry that are developing and implementing the decarbonisation technologies needed. To meet global climate change targets, the challenge for the industry is to speed up and scale up this technology development and investment.

As electricity market liberalization progresses in Europe, more and more coupled ancillary services markets open in different countries. While large industrial plants were in the past already participating e.g. in frequency containment reserves (FCR), the opening in France of the automatic frequency restoration reserve (aFRR) brings with it new opportunities in terms of explicit flexibility revenues as well as related positive environmental impact. Indeed, providing such services with demand modulation allows conventional production means to operate at better efficiency. In November 2023 the aFRR market opened partially in France with the possibility of placing energy bids. Since mid of June 2024, the market is fully open with the capacitive part being operational.

In this paper, Energy Pool highlights the potential of energy flexibilities, both implicit and explicit, the evolving ancillary services market in France and other countries where they operate large industrial assets. In particular, the aFRR market opening and associated price level is discussed. The certification process of industrial assets such as electrolysers is presented: indeed, they are technically suited to operate on these high profitability markets. The associated economic and environmental benefits are documented as well for different electrolysis processes as for e.g. electrical boilers.

The past year has been eventful for the aluminium market. Changing trade flows for primary metal following the ever tightening of sanctions on Russian metal and the recent Red Sea shipping crisis have moved both the LME price and physical premiums.

The short-term outlook for the market is clouded by uncertainty. Consumption looks set to disappoint in Europe and possibly the US with interest rate reductions pushed pack further into 2024. Meanwhile, Chinese demand growth is expected to remain patchy with firm offtake from the energy transition sector counter balanced by weak demand from the construction sector. Against this background prices will struggle to show any strong momentum.

However, the next few years could turn out to be important pivot points for the longer-term outlook for the aluminium market. We will assess the impact of Carbon Border Adjustment Mechanism (CBAM) on the European aluminium market as well provide analysis on a 1.5 °C and 2.0 °C global warming increase climate scenarios.

The aluminium industry stands at the forefront of the global transition to a low-carbon economy, driven by increasing regulatory pressures, investor demands and consumer preferences for sustainable materials. This presentation by Fastmarkets delves into the market dynamics shaping the low-carbon aluminium sector and the prices for these products by region. We will explore the willingness of aluminium buyers to pay for low-carbon production, highlighting major players and brands, emerging end markets and the role of renewable energy and scrap in reducing carbon footprints.

A critical analysis of the challenges and opportunities by region will be provided, addressing issues such as upcoming policy impacts and the need for industry-wide collaboration. Case studies of successful low-carbon initiatives will be presented, offering insights into new partnerships and technological advancements.

Fastmarkets is a global price reporting agency with more than 150 years of specialist commodity expertise. Our team of skilled price reporters assess low-carbon aluminium markets in the United States, Europe and Japan using a carbon threshold of 4 tonnes of CO2 emissions per tonne of aluminium produced.

By the end of this presentation, participants will gain a deeper understanding of the global drivers behind low-carbon aluminium pricing, equipping them with knowledge to navigate the evolving landscape of sustainable aluminium production.

Panel discussion following the presentations