European Aluminium & the Pact for Sustainable Industry

European Aluminium joined the European Pact for Sustainable Industry. For the occasion, we talked with Sandro Starita, Director for Environment, Health, Safety & Sustainability, about the challenges faced by the aluminium sector, how they are supporting the Commission’s Green Deal, and the importance of collaboration to scale up sustainability impact on the ground.

The von der Leyen’s Commission is moving forward to make Europe the first climate-neutral continent by 2050. What are the short-term and long-term challenges your sector is facing amidst Europe’s digital and green transition?

Sandro Starita: The path towards climate neutrality is long and challenging, and aluminium industrial facilities need to stay competitive during the transition to be able to deliver their contribution.

The main decarbonisation pathways for our sector are clear:

Decarbonisation of the energy supply, which is by far the main source of emissions - albeit indirectly and with the highest associated costs
Reduction of the direct emissions from the production and transformation processes,
Increasement of post-consumer recycling to replace high-carbon primary supply.

The fact that aluminium is traded globally, with a reference price set at the London Metals Exchange for all players, creates fierce competition on production costs across regions, which can only be fair if there is a level playing field. The significant risk for carbon leakage for our sector, which starts with an investment leakage, is concrete and acknowledged on various occasions by the EU Commission. Some support measures were put in place in this respect; however, the situation is further complicated by the impact of unfair market practices in competing regions, especially China, which have also been acknowledged and sanctioned with EU-anti-dumping measures on certain Chinese aluminium flat-rolled products and extrusions. On these premises, any additional legislative burden unilaterally added clearly impacts the competitiveness of the European industry vis-à-vis its global competitors, which often do not bear comparable regulatory costs. The climate change challenge is global and needs global solutions. Unilateral initiatives at the regional level supporting the decarbonisation efforts of the European industry, if not aligned and harmonised globally, risk creating the basis for carbon leakage without any real environmental benefit.

In a nutshell, the main short-term challenge for our sector is to stay competitive during the transition, to ensure the economic and financial viability of the decarbonisation efforts. In the longer term, the challenge is the actual delivery of the ambitions from a technical and economic perspective.

Your industry federation has launched its sustainability roadmap towards 2025 and developed a Vision 2050. How are they contributing to reaching Europe’s climate neutrality?

Sandro Starita: The European aluminium industry completely subscribes to the vision of a more sustainable future for Europe, and supports the ambitious targets set by the EU Commission on climate, as well as on resource-efficiency and social aspects. We are also convinced that this future vision needs a solid industrial base, to provide the materials and services instrumental to achieving ambitious goals.

Aluminium has all the right characteristics to act as a key partner in this respect: durable, versatile and endlessly recyclable, it is a fundamental material for the future of mobility, buildings, packaging, carbon-free energy and many other crucial applications. The demand for aluminium is constantly growing both at the European and at the global level, and this trend is expected to continue in the coming decades.

Our sector started about 20 years ago to regularly report on a broad range of Sustainable Development Indicators, to monitor the progress in important areas ranging from environmental management, energy and climate performance, safety in the workplace and many others. On this basis, few months before the UN SDGs and the Paris Agreement, in 2015, we launched the Sustainability Roadmap towards 2025, voluntarily setting ambitious targets for the decade based on the past achievements. This pioneering exercise reflected a holistic approach to sustainability, along the main pillars of production/transformation processes, products and social dimension.

The world has significantly changed since then, also in unforeseeable ways. Therefore, we are currently conducting a mid-term review of the roadmap to assess the overall programme after 5 years of implementation, accounting for the changed context, trends and ambitions that emerged in the meantime.

To complement and broaden the sustainability perspective, in the last couple of years we also developed a Vision 2050, focusing on the decarbonisation potential for our primary business, and a Circular Aluminium Action Plan, to explore routes to further develop the recycling dimension of aluminium ahead of the net-zero target of the European Green Deal.

In essence, we support the holistic approach to sustainability reflected in the UN SDGs, embracing the complexity and the mutual interactions of the different perspectives. Still, the climate challenge is increasingly taking the centre-stage, therefore our sector is carefully looking into how to contribute to the path towards net-zero in 2050, from two complementary routes through:

The reduction of the carbon footprint of the supply of aluminium.
Aluminium applications that support the decarbonisation of the economy, e.g., in mobility, buildings, packaging, energy supply and many others.

How are you promoting collaboration amongst companies and stakeholders operating in your sector to scale up impact on the ground?

Sandro Starita: The success of any ambitious journey - and the one towards sustainability is no exception- needs partnerships, engagement, and cooperation. Since our first steps, we took onboard external stakeholders to define the set of Sustainable Development Indicators to report on, then targets to include in the Sustainability Roadmap, and more recently, the criteria to assess the progress made. The input has been invaluable, providing an external perspective and often challenging views. Each target of the roadmap has a leading working group within the association, where experts from members exchange best practices and discuss what type of initiatives the sector can jointly put in place towards the target, within the boundaries of confidentiality and competition.

A very good outcome in this respect was the launch of an online Safety Platform open to all members, to allow the exchange of best practices, accident reports, safety statistics and relevant information to improve safety in the workplace. Another good example is the guidelines developed for the management of one of the main industrial wastes generated in our sector, presenting the available treatment options to the member companies. Furthermore, European Aluminium created an Innovation Hub to develop and coordinate joint innovation projects relevant for the sector across the value chain, in partnership with relevant external stakeholders, and our Market Groups have various ongoing projects aimed at improving the design and performance of aluminium in products and their end-of-life management. Some areas have clearly more confidentiality challenges than others, hence the level of detail that can be discussed among members and/or with external stakeholders vary. Nonetheless, we will continue on the path of engagement and cooperation, as the best way forward to obtain ambitious results.

How are you aligning your sustainability strategy/action plan to the direction set by the Commission? What are the top 3 EU policy priorities are you engaged on?

Sandro Starita: The overarching sustainability objectives set by our sector are fully aligned with those identified by the European Commission, although we obviously approach them from a different point of view.

Aluminium can play a crucial role in a more sustainable future for the European economy and society in:

The decarbonisation of transport.
The energy efficiency of buildings.
Efficient packaging and in many other applications.

Aluminium’s endless recyclability without the loss of properties makes it a perfect partner to a circular economy, contributing to the preservation of resources.

To deliver this potential, our industry needs to plan mid to long-term investments in innovation, process improvement and product design within a level competitive field. Both the climate and the resource challenges are global; hence it is important that effective measures are put in place at the European level to avoid carbon and investment leakage to the benefits of regions without comparable legislative ambitions, and whose industrial players do not bear the associated costs. Our policy priorities are therefore those linked to: