Recently, Norway's Hydro released a report claiming to have achieved company-wide carbon neutrality in 2019, and to have entered the carbon negative era from 2020. I downloaded the report from the company's official website and took a closer look at how Hydro achieved carbon neutrality when most companies were still in the "carbon peak" stage.
Let's see the result first.
In 2013, Hydro launched a climate strategy with the goal of becoming carbon neutral from a life-cycle perspective by 2020. Please be noted that, from a life cycle perspective.
Let's take a look at the following chart. Since 2014, the carbon emission of the whole company has been declining year by year, and it has been reduced to below zero in 2019, that is, the carbon emission of the whole company in the production and operation process is lower than the emission reduction of the product in the use stage.
The accounting results show that in 2019, Hydro's direct carbon emissions were 8.434 million tons, indirect carbon emissions were 4.969 million tons, and emissions caused by deforestation were 35,000 tons, with a total emission of 13.438 million tons. The carbon credits that Hydro's products can obtain in the use stage are equivalent to 13.657 million tons, and after the carbon emissions and carbon credits are offset, Hydro's carbon emissions are negative 219,000 tons.
Now how does that work.
First, the definition. From a life cycle perspective, carbon neutrality can be defined in a number of ways. In Hydro's climate strategy, carbon neutrality is defined as the balance between emissions during the production process and emissions reductions during the use phase of the product.
This lifecycle calculation model is important.
Hydro's climate models, from the company's point of view, cover all businesses under company ownership, The model carbon emission calculation covers both scope 1 (all direct greenhouse gas emissions) and Scope 2 emissions (indirect greenhouse gas emissions due to purchased electricity, heat or steam consumption) as defined by the World Business Council for Sustainable Development WBCSD GHG Protocol.
Hydro produced 2.04 million tons of primary aluminum in 2019, and if the carbon emission is 16.51 tons of CO²/ ton of aluminum according to the world average, then the carbon emission in 2019 should be 33.68 million tons, but the result is only 13.403 million tons (843.4+496.9), far below the world level of carbon emissions.
More importantly, the model has also calculated the emission reduction brought by aluminum products in the use stage, that is, the figure of -13.657 million tons in the figure above.
Hydro mainly reduces the level of carbon emissions across the company through the following paths.
[1] The use of renewable energy, while improving technology to reduce electrolytic aluminum electricity consumption
[2] Increase the use of recycled aluminum
[3] Calculate the carbon reduction of Hydro products during the use stage
Therefore, half of Hydro's carbon neutrality is achieved through technological emission reduction, and the other half is calculated through models.
1.Water Power
Hydro is Norway's third largest hydropower company, with a normal annual capacity of 10TWh, which is used for the production of electrolytic aluminum. The carbon emissions of producing aluminum from hydropower are lower than the world average, because most of the world's primary aluminum production uses electricity generated from fossil fuels such as natural gas or coal. In the model, Hydro's hydropower production of aluminum will displace other aluminum in the world market, which is equivalent to reducing emissions. (This logic is convoluted.) This is partly based on the difference between aluminium produced from hydropower and the global average, credited to Hydro's total emissions by the following formula:
Where: 14.9 is the world average electricity consumption for aluminum production 14.9 kWh/ kg aluminum, and 5.2 is the difference between the carbon emissions of aluminum produced by Hydro and the "world average" (excluding China) level. Both figures are based on a report by the International Aluminum Association.
2. A lot of recycled aluminum is used
Aluminum is a metal that can be recycled almost indefinitely. The carbon emissions of recycled aluminum are only about 5% of that of primary aluminum, and Hydro reduces its overall carbon emissions through the extensive use of recycled aluminum.
Through hydropower and the addition of recycled aluminum, Hydro has been able to reduce the carbon emissions of aluminum products to below 4 tons of CO²/ ton of aluminum, and even to below 2 tons of CO²/ ton of aluminum. Hydro's CIRCAL 75R alloy products use more than 75% recycled aluminum.
3. Calculate the carbon emission reduction generated by the use stage of aluminum products
Hydro's model believes that although primary aluminum will emit a lot of greenhouse gases in the production stage, the lightweight application of aluminum can greatly reduce energy consumption, thereby reducing greenhouse gas emissions in the use stage, and this part of the emission reduction caused by the lightweight application of aluminum is also accounted for in the carbon neutral contribution of Hydro, that is, the figure of 13.657 million tons. (This logic is a bit complicated and hard to follow.)
Because Hydro only sells aluminum products, it realizes the terminal application of aluminum through other enterprises in the industrial chain. Here, Hydro uses a Life-Cycle Assessment (LCA), which claims to be an independent third party.
For example, in the transportation sector, third-party studies have shown that for every 1kg of aluminum substituted for 2kg of steel, 13-23kg of CO² can be reduced over the life cycle of the vehicle. Based on the volume of aluminum products sold to various downstream industries, such as packaging, construction, refrigeration, etc., Hydro calculates the emission reduction resulting from the aluminum products produced by Hydro.
Post time: Jul-20-2023