Aluminium could be the key to a just climate transition

The World Benchmarking Alliance’s (WBA) first Heavy Industries Benchmark, published today, reveals that the companies’ emissions intensity reductions are currently not aligned with a 1.5-degree trajectory.
Source: anncapictures;

There is not yet enough investment in market-ready technologies, but good practice provides hope that robust transition planning is possible throughout the sectors.

The heavy industries sectors of aluminium, cement, and steel – are critical to the world’s decarbonisation journey. They deliver the materials necessary for a transition to a more sustainable future. From electric vehicles to new homes to wind turbines and solar panels, the demand for production from heavy industries will continue to grow in the next decade.

Yet, to meet decarbonisation goals, manufacturers, and suppliers of these materials cannot maintain business as usual, as they are currently responsible for emissions representing 18% of global CO2, and just the 91 assessed companies were responsible for 7% of global energy-related emissions in 2022.

WBA’s research found that emissions intensities from companies need to fall 3 times faster in the next 5 years to align with a 1.5 trajectory. If these reductions are not reached by 2030, the need for more market ready technologies will be even more critical.

The assessed sub-sectors have new and innovative technologies available that can lead companies towards a low carbon future, but investments in R&D for market-ready technologies is insufficient. Of the companies assessed, 24% disclose R&D expenditure in low-carbon technologies, and just 10% in non-mature technologies.

To ensure decarbonisation doesn’t stop with them, companies should be collectively building the foundation for transition planning. Our results found that good practice was observed across the sector with 28% of companies having transition plans that encompass all business units/operations, 13% cover the entire companies value chain, 23% incorporate a carbon price calculation and 8% align with low-carbon scenarios. This highlights that these sectors can elevate standards for key players and assist laggards to join the rest.

WBA also assessed the 91 companies on their social impact and just transition efforts. As for the latter, results show most companies aren’t supporting a just transition. The highest scorer got only half the available points and on average, companies score less than 5%. This highlights the urgent need for improvement, though top performers prove a just transition is possible across the sectors.

The need for just transition plans is more important than ever, with people and communities impacted by heavy industries from employment to health. More than 2.9 million workers were directly employed across the companies we assessed in 2022. Yet, companies are still showing a widespread lack of dedication and initiative when it comes to basic responsible business conduct. Less than 45% of all companies we assessed have committed to respecting human rights, and half (55.4%) are committed to protecting the health and safety of their workers.

Overall, these sectors underline the dual role of heavy industries as both delivering the material production crucial for the transition, but also as the industries in which emissions are particularly difficult to abate. Long investments cycles of typically 40 years means that facilities in place today will likely remain emitting well past 2050.

The aluminium sector plays a crucial role in supplying battery enclosures for Electric Vehicles, charging stations and infrastructure, and power transmission lines.

Read the full benchmark


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