Australian Aluminium Industry Energy and Emissions Reporting

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An introduction to the Energy and Emissions reporting of the Australian Aluminium Industry

An introduction to the Energy and Emissions reporting of the Australian Aluminium Industry

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  • 1. Australian Aluminium Industry Energy and Emissions Reporting Monitoring Evaluating and Reporting Research Project Adv Dip AEM TAFE NSW Paul Boundy 2 May 2013
  • 2. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 1 of 6 Executive Summary A full examination of the Aluminium industry would cover the mining of bauxite and the production of firstly Alumina and then Aluminium, with an examination of the transport of these products around Australia and the world. This report examines the primarily the Energy and Emissions reporting of the Aluminium Industry in Australia particularly with a focus on aluminium smelting as this industry is a user of large amounts of coal powered electricity. The report commences by examining the sustainability report of the Australian Aluminium Council, and then examines the reporting of Alcoa Australia. Contents Executive Summary.................................................................................................................................1 Figures.....................................................................................................................................................1 Tables......................................................................................................................................................1 Aluminium Industry Overview ................................................................................................................2 Locations and Transport .....................................................................................................................2 Industry Stakeholders.............................................................................................................................2 Reporting for the National Greenhouse and Energy Scheme.................................................................3 Aluminium Smelting Industry .................................................................................................................3 Companies and their Emissions..........................................................................................................3 Industry Reporting ..................................................................................................................................4 Australian Aluminium Council Sustainability Report..........................................................................4 Reporting Requirements at Alcoa Australia........................................................................................4 Conclusion...............................................................................................................................................6 References ..............................................................................................................................................6 Bibliography ............................................................................................................................................6 Abbreviations..........................................................................................................................................6 Figures Figure 1 - The Australian Aluminium Industry ........................................................................................2 Figure 2 - Total Smelter Emissions..........................................................................................................4 Tables Table 1 - Australian Smelting Facilities ...................................................................................................3
  • 3. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 2 of 6 Aluminium Industry Overview Aluminium metal is produced in three broad steps. Firstly, Bauxite ore is mined which is then refined into Alumina (Aluminium Oxide: Al2O3) and finally this is smelted to make aluminium ingots. Locations and Transport Figure 1 below shows that in Australia, some mining, refining and smelting operations are co-located but in all cases, either Bauxite or Alumina must be shipped large distance from one plant to the next (AAC, 2012, p. 20). Refining often occurs nearby the mining operation, but not in the case of Gladstone. Smelting usually occurs near a good sea port and a good supply of coal as large amounts of uninterrupted electrical power are required to smelt the alumina into aluminium. Bauxite, Alumina and Aluminium are also shipped to overseas markets resulting in a further carbon footprint. The fuels or energy used in mining, refining, smelting and transport of each product result in the industry being a major contributor of GHG emissions. Figure 1 - The Australian Aluminium Industry Industry Stakeholders The major stakeholders of this industry are not only the shareholders and managers of the shareholding companies. The employees have a major stake, as it is their source of income and safety issues within the operation may pose a direct danger to them. The members of the local community where the smelters operate are also important stakeholders as they provide flow-on services to the smelter employees and thus are indirectly employed by it. Furthermore, the waste products of the operation may affect the community’s local environment. As the industry uses considerable amounts of electricity, it also has a carbon or greenhouse gas emission impact for Australia and the world.
  • 4. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 3 of 6 Reporting for the National Greenhouse and Energy Scheme In the Aluminium industry, one of the main drivers for measuring and reporting GHG emissions is the Australian National Greenhouse and Energy Reporting Act 2007. This Act enabled the creation of the National Greenhouse and Energy Reporting Scheme (NGERS) that is administered by the Australian Clean Energy Regulator. The regulations of this Act define the main two ‘scopes’ for GHG emission.  Scope 1: Direct emissions from an activity of an industry facility such as the generation of electricity, and the burning of a fuel.  Scope 2 Indirect emissions from the consumption of energy where the generation of the energy is not part of the industries facility. For example the use of electrical energy by a facility where that electrical energy is generated external to the facility. These regulations indicate thresholds for the production of GHGs, the production of energy, and the consumption of energy. Different threshold levels are set depending on whether the control and structure of the company’s facilities are individual or a corporate group. If any of these three thresholds are exceeded by a facility or group, each of the items must be reported to the Clean Energy Regulator. For an individual facility, the threshold is 25ktCO2-e GHG or 500TJ of energy produced or consumed. For a corporate group, the threshold is 50ktCO2-e GHG or 200TJ of energy produced or consumed. To simplify comparison of energy figures, 100TJ (Terajoules) equals 27,777 MWh (megawatt hours) or approximately 28 GWh (gigawatt hours). Aluminium Smelting Industry Companies and their Emissions The shareholder information shown below in Table 1 was extracted from the Australian Aluminium Council’s Sustainability Report for 2011 (AAC, 2012, p. 21) and shows the ownership and capacity of the six smelters in operation in Australia. There are three main players in this industry, Pacific Aluminium, Hydro Aluminium and Alcoa of Australia. Table 1 - Australian Smelting Facilities Smelters Major Shareholders (percentage ownership) Production Capacity of Aluminium (kilotonne/annum) Bell Bay, Tasmania Pacific Aluminium* (100%) 170 Boyne, Queensland Pacific Aluminium* (59.39%) 550 Kurri Kurri, New South Wales Hydro Aluminium (100%) 180 Point Henry, Victoria Alcoa of Australia (100%) 190 Portland, Victoria Alcoa of Australia (55%) 350 Tomago, New South Wales Pacific Aluminium* (51.55%), CSR (36.05%), Hydro (12.4%) 530 *Pacific Aluminium smelters were formerly owned by Rio Tinto Alcan. Other information in the sustainability reports indicates that this is not a company name change but a change of ownership. The total capacity is 1970 kt/annum and the smallest smelters at Bell Bay and Kurri Kurri make up respectively 8.6% and 9.1% of this output.
  • 5. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 4 of 6 The sustainability report also indicates that these six smelters emit a total of 30.5 Mt CO2-e of GHGs as show in the figure 2, (AAC, 2012 pg. 1). The bulk of these emissions are indirect emissions or scope 2 due to the consumption of electrical energy. The NGERS Technical Guidelines (pg. 280-287) detail the methods to be used to calculate these emissions so that the result has a degree of scientific accuracy and is comparable between facilities around Australia. Using the above smelting capacity percentages for the two smallest smelters, as an approximation these facilities emit 2.6 Mt CO2-e and 2.8 Mt CO2-e. These emission levels exceed the NGERS reporting threshold of 25kt or 50kt by a factor of 100, so NGERS reporting is mandatory. Industry Reporting Australian Aluminium Council Sustainability Report The AAC sustainability report includes a range of reporting information relevant to stakeholders, government and the industry itself.  Total production per annum for bauxite, alumina and aluminium.  Export and import trade volumes  Revegetation partnering with a local school community  Safety including injury frequency and lost time  Water use in alumina refineries  Fluoride emissions (gas and particulate)  Energy use for production of alumina and aluminium  Area of mines rehabilitated  Disposal or reuse of spent pot linings (considered a hazardous waste)  GHG Emissions  Aluminium Recycling  Employment (reflecting on a slump in the global aluminium market) Reporting Requirements at Alcoa Australia Annual Report The Annual Report provides considerable information to stakeholders and shareholders on the financial performance of the company. The report also details operational changes and expresses a plan for the future with respect to the current financial climate, (Alcoa, 2013a). There is also a legal requirement for the company to submit the Annual Report to the Australian Securities and Investment Commission. Sustainability Report Alcoa’s Sustainability Report is a comprehensive document which details the material and energy inputs and outputs of each of its facilities. This is a key document for stakeholders of the company. Some of the outputs measured and reported are: Direct and Indirect CO2-e emissions; Bauxite Residue used and stored; Fly ash stored; Oxalate stored; Spent Pot Lining stored and recycled; Dross production treated onsite and offsite; Recycled waste and Landfilled waste; Hectares of land rehabilitated. Some of the inputs measured are: Electricity; Gas; Diesel and fuel oils; Water use; Land cleared. The report informs its audience of the projects the company is pursuing to reduce its environmental impact such as recycling aluminium, and introducing lightweight products for the transport sector, thereby having a flow on reduction of transport emissions. Figure 2 - Total Smelter Emissions
  • 6. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 5 of 6 This report and many others mention the recycling benefits of aluminium, such as 95% less energy required to produce aluminium from recycled material than raw materials. NGERS Energy and emissions reporting under NGERS is primarily for statutory compliance, but it also informs stakeholders both internal and external to the company and industry. Furthermore, it establishes a consistent level of internal measuring and reporting which enables the business to improve its performance. Environmental Improvement Plan (EIP) Twice a year, Alcoa Australia releases its internal EIP. The aim of the EIP is to continuously improve environmental performance. ‘While EIPs are required in Victoria under the Environmental Protection Authority licence conditions, they are a voluntary initiative by Alcoa in WA and NSW, as there is no requirement in those States to produce them.’ (Alcoa 2013b) The EIPs deliver improved transparency and accountability and cover areas such as:  Air quality, including greenhouse gas and energy efficiency;  Noise and waste management;  Water conservation;  Groundwater management;  Land management, including visual amenity, rehabilitation and fauna/flora management;  Community involvement; and  Environmental regulation, (Alcoa, 2013b) Sulphur Dioxide Emission reporting Alcoa Australia also operates a brown coal fired power station in Anglesea Victoria. This plant emits sulphur dioxide (SO2) which is monitored and reported to the Victorian EPA. The company has developed a SO2 Early Warning Modelling Tool which warns of potential exceedance of SO2 emission limits due to approaching weather conditions. The tool has enabled the company to improve its load management systems, (Alcoa, 2013c) International Reporting Standards and Recognition The company uses the Global Reporting Initiative (GRI) standards for its Australian and International sustainability reporting. Internationally, Alcoa has been measured by others through its inclusion in the Dow Jones Sustainability Index (DJSI) for eleven consecutive years, (Alcoa, 2013d). Refinery Reporting Alcoa refineries in WA such as Wagerup must submit an Environment Review and Management Program to the WA Environmental Protection Authority (EPA) and they also must submit an Annual Audit Compliance Report (AACR) to meet WA Ministerial requirements. A more detailed Environment Report is submitted annually to the WA Department of Environment and Conservation (DEC). Refineries develop projects for the reuse of wastes or residues in construction and agricultural amendments. These projects must report compliance to DEC, and meet EPA commitments, (Alcoa, 2013e).
  • 7. Australian Aluminium Industry Energy and Emissions Reporting Paul Boundy 2 May 2013 Page 6 of 6 Conclusion The aluminium industry is large and has environmental reporting in each part of the industry. The industry recognises its environmental impact and is taking many steps to reduce those impacts. One cannot overlook the benefit of aluminium being a highly recyclable product. It would be a major step forward to dramatically increase recycling rates, with a container deposit scheme that has proven to work in South Australia and around the world. Yet this may have a negative effect on the production of new aluminium, an industry that is already in difficult times. References Alcoa 2013a, Alcoa 2012 Annual Report, viewed 1 May 2013, http://www.alcoa.com/global/en/investment/pdfs/2012_Annual_Report.pdf Alcoa 2013b, Environmental Improvement Plans, viewed 1 May 2013, http://www.alcoa.com/australia/en/info_page/EIP.asp Alcoa 2013c, 2008 Shows Success for Anglesea SO2 Management Project, viewed 1 May 2013, http://www.alcoa.com/australia/en/info_page/sustain_env_case_anglesea.asp Alcoa 2013d, Alcoa Named to the Dow Jones Sustainability Indexes: World and North America, viewed 1 May 2013, http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20120913006628en&newsYear=2 012 Alcoa 2013e, Wagerup Refinery Annual Audit Compliance Report - 2012, viewed 1 May 2013, http://www.alcoa.com/australia/en/pdf/2012_wagerup_annual_audit_compliance_report.pdf Australian Aluminium Council Ltd (AAC) 2012, Sustainability Report, viewed 27 April 2013 http://aluminium.org.au/_literature_127988/Sustainability_Report_2011 Clean Energy Regulator 2012, ‘Step 1: Be aware of reporting thresholds’, viewed 1 May 2013, http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/steps-for- reporting-corporations/NGER-reporting-step-1/Pages/default.aspx CommLaw 2012, National Greenhouse and Energy Reporting Act 2007, viewed 1 May 2013, http://www.comlaw.gov.au/Series/C2007A00175 Department of Climate Change and Energy Efficiency 2010, NGERS Technical Guidelines, viewed 1 May 2013, http://www.climatechange.gov.au/en/government/initiatives/national- greenhouse-energy-reporting/publications/~/media/publications/greenhouse-report/nger- technical-guidelines-2011-pdf.pdf Bibliography Australian Aluminium Council Ltd, viewed 27 April 2013 http://aluminium.org.au Department of Climate Change and Energy Efficiency 2012, National Greenhouse and Energy Reporting, viewed 1 May 2013, http://www.climatechange.gov.au/reporting Abbreviations AAC Australian Aluminium Council Ltd GHG Greenhouse Gas NGERS National Greenhouse and Energy Reporting Scheme