En+ Group together with its Metals Segment represented by RUSAL have published research showing the vital role low-carbon aluminium will have to play to avoid embedded emissions spiralling under Korea’s Carbon Neutral Strategy. The paper forecasts a boom for the country’s downstream aluminium producers but warns of the need to transition to low-carbon sourcing as green industries in Korea increasingly look to align supply chains for products with their climate mission.
Research by En+ Group shows unprecedented opportunity for Korean manufacturers of aluminium products provided sourcing aligns with green transition
En+ Group (LSE: ENPL; MOEX: ENPG), the world’s largest producer of low-carbon aluminium and independent hydropower, together with its Metals Segment represented by RUSAL have published research showing the vital role low-carbon aluminium will have to play to avoid embedded emissions spiralling under Korea’s Carbon Neutral Strategy. The paper forecasts a boom for the country’s downstream aluminium producers but warns of the need to transition to low-carbon sourcing as green industries in Korea increasingly look to align supply chains for products with their climate mission.
Drawing on market data analysis, the paper highlights an expected 20 % increase in aluminium demand in Korea between 2020 and 2025, reaching 1972 kt by the middle of the decade. The significant increase is driven by the rapid growth of carbon-sensitive industries supported through the Korean government’s push for carbon neutrality by 2050. Focusing in particular on the automotive and construction sectors, the paper points to growth in end-use demand in electric cars, green buildings and distributed renewable energy systems as major drivers of aluminium demand. Consumption within the automotive and construction sectors is set to rise 27 % and 18 % respectively to 2025, while demand for aluminium packaging is set for a 10 % rise as popular brands take advantage of the metal’s near infinite recyclability.
The paper highlights a gulf in emissions between aluminium products depending on whether coal or renewable energy are used in the production of the primary metal. Aluminium imported into Korea, which makes up all the primary metal used by the country’s downstream producers, is estimated to have an emissions intensity of 11.4 tCO2e/tAl. The figure falls to 6.86 tCO2e/tAl when recycled material is factored into the equation. This aluminium carbon footprint intensity can be further reduced with a greater consumption of primary aluminium produced from renewable hydropower or other renewable energy, together with maximizing the recycling of aluminium scraps.
Based on RUSAL’s research and experience, En+ Group warns that failing to address the carbon intensity of primary aluminium could undermine Korea’s green transition. The paper shows an increasing awareness of these embedded emissions among green industries in Korea and beyond, which is set to drive demand for low-carbon inputs. Three-quarters of the leading global automakers are found to have numerical targets for cutting lifecycle emissions, while increasing uptake of Korea’s green building standard, G-SEED, is driving construction businesses to revaluate the impacts of their raw materials.
In response to increased demand for low-carbon materials, the paper calls on Korea’s downstream aluminium producers to work with their primary metal suppliers to enhance emissions disclosure and set phased pathways for decarbonisation. To help achieve these pathways, the paper suggests bold collaboration throughout the supply chain, including joint R&D, investment and advocacy. The paper also calls on policymakers to assist the country’s aluminium transformers to seize the opportunity of the low-carbon transition by setting clear standards for emissions disclosure and using guidelines for green public procurement to promote a clear benchmark for what constitutes low-carbon aluminium. As an additional measure, it suggests authorities explore opportunities to reduce import tariffs on aluminium that meets a low-carbon standard, making it cheaper for Korean industries to purchase, incentivising primary producers to decarbonise and increasing the overall availability of sustainable materials.
Steve Hodgson, International Sales Director of RUSAL, the Metals segment of En+ Group, said:
“The Carbon Neutral Strategy will transform Korea’s economy with a tide of green innovations. From electric vehicles to green buildings, solar panels to beverage cans, aluminium will be a key ingredient of the low-carbon transition. However, if the use of primary aluminium made using coal-powered energy is maintained in downstream applications, it risks embedding emissions within the very materials relied upon to build a greener future”.
