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The global aluminium industry, vital to sectors such as automotive, construction, and aerospace, faces the challenge of meeting rising demand while reducing its environmental impact. Indian aluminium industry, which is the world's second-largest producer, contributed 5% to global output in 2022. Led by Vedanta, Hindalco, and NALCO, it is crucial to India's economy and trade. However, being coal based high energy consumption and carbon intensive, the industry emits approx.16-20 tonnes of CO2 per tonne of aluminium. Smelters in the industry is major energy consumer and Indian smelters consume energy between 12,973 to 14,500 kWh per metric tonne (Mt) that is comparable to global levels.
Hence, the sector globally started adopting decarbonisation practices like transitioning to renewable energy, deploying technologies such as inert anodes, and implementing CCUS. Implementing decarbonisation technologies involves significant investments but promises long-term benefits. The Indian sector too needs a comprehensive strategy tailored to its conditions and challenges. Projections indicate a potential reduction in emissions from 74.87 million tonnes of CO2 (Mt CO2e) in FY 2022-23 to 56.92 Mt CO2e by FY 2032-33 through Renewable Purchase Obligations (RPO) and energy efficiency measures. As a result, the emission intensity is projected to decline from 19.70 to 9.31 tCO2e/Mt over the same period. Further, policy interventions are crucial, including providing round-the-clock renewable power, waiving interstate transmission system (ISTS) charges, and fostering research and development (R&D).
This report provides insights and recommendations to empower the Indian aluminium industry in reducing carbon emissions. By adapting global practices and assessing the viability of decarbonisation technologies, the industry can move towards a resilient and eco-friendly future, maintaining competitiveness amidst evolving regulations like the Carbon Border Adjustment Mechanism (CBAM).
Transformation requires collaboration among industry leaders, policymakers, and stakeholders. Effective leadership is essential for driving a culture of sustainability. Industry players should be involved in setting energy efficiency and decarbonisation targets and supporting collaborative research programs.
Also, research and development are critical. Therefore, Institutes like JNARDDC should collaborate with the Bureau of Energy Efficiency (BEE) and industry players to develop indigenous technologies. Collaborative research initiatives and international partnerships can enhance skills and promote low-carbon technologies. Partnerships within the aluminium industry and other sectors can enhance knowledge sharing and innovation too.
Creating industrial clusters and resource-sharing networks can optimize demand, scale operations, and mitigate risks. Industry stakeholders can lead demonstrations of low-carbon technologies and implement extended producer responsibility (EPR) programs. Embracing these strategies will reduce the environmental footprint, meet global demand, and maintain competitiveness in an evolving regulatory landscape.
