The aluminium industry generates more than 1.1 billion tonnes of CO2 (carbon dioxide equivalent) emissions annually – around 2% of global anthropogenic emissions. In view of the projected growth in demand for aluminium, emissions need to be addressed to limit global warming to 1.5°C in order to curb climate change risks.

The aluminium industry consists of three component segments: upstream aluminium, downstream aluminium, and recycled aluminium. The upstream aluminum sector is responsible for the sourcing of raw material components from mined bauxite that is then refined into alumina and smelted into aluminum. Aluminum production is usually accomplished in two phases. In the first stage, bauxite ore is refined to obtain aluminum oxide through the Bayer process. The Hall-Heroult process of smelting the aluminum oxide to release pure aluminum comprises the second stage. Upstream production of aluminum involves the mining of bauxite and refining it into alumina. The downstream segment refers to the production of semi-fabricated aluminum products and their use in a wide range of sectors, from manufacturing and automobiles to construction and consumer products. Aluminium not only offers durability, but also is lightweight and infinitely recyclable, meaning it has clear environmental benefits compared to other similar inputs, such as steel or plastic.

While aluminium does offer some environmental benefits, producing it is carbon intensive. Aluminium production processes have changed very little since the 1800s, and many countries continue to rely on coal to produce the electricity required for aluminium production. Globally, the aluminium sector contributes roughly 2 percent of GHG emissions—equivalent to about 1.1 billion tons of carbon dioxide (CO₂). Yet demand for aluminum is expected to increase by 50 to 80 percent by 2050. In 2019, the aluminium industry consumed 6 percent of all global coal-fired electricity, exceeding the total amount of coal-fired electricity generated in Europe. That same year, coal-fired electricity used in aluminium electrolysis produced 636 million tons of C0₂ emissions, or 58 percent of the sector’s carbon footprint. On average, 72 percent of GHG emissions from primary production of aluminium are from electricity, meaning greater use of renewable energy in aluminium production could significantly decrease the sector’s carbon output. According to the Intergovernmental Panel on Climate Change (IPCC), global CO₂ emissions need to decrease by 45 percent by 2030 in order to keep global warming below the 1.5 degree threshold. By accelerating the deployment of renewables and designing policies that encourage and support the decarbonization of heavy industry, the private and public sectors can play key roles in helping to reduce carbon emissions, while also continuing to grow the global economy.