Aluminium industry production: Reshoring, recycling and efficiency for increased capacity

Frederik Esterhuizen, Global Business Line Manager for Metals at ABB, discusses the future of aluminium, asserting that reshoring, recycling, and efficiency will lead to increased capacity

Aluminium’s versatility makes it a critical material across countless industries, with demand projected to soar 15% globally by 2029. From lightweight car parts to beverage cans, aluminium’s unique combination of strength, malleability and recyclability has made it a cornerstone of modern life.

However, this essential metal comes at a cost – its production is highly energy-intensive, traditionally relying on a melting process that releases significant amounts of greenhouse gasses. In fact, aluminium production accounts for approximately 1.1 billion tonnes of global CO2 emissions per year.

The aluminium industry is undergoing a transformative shift, driven by a perfect storm of environmental concerns, geopolitical tensions, and technological advancements. Consumers increasingly demand sustainable products, while manufacturers face mounting pressure to reduce their environmental footprint. At the same time, rising geopolitical tensions are disrupting traditional supply chains, highlighting the need for more secure and reliable sources of aluminium.

These factors have converged to present an opportunity for the North American aluminium industry to reinvent itself, embracing sustainability and a regionally focused approach. While the U.S. is already making considerable investments to boost domestic production across the country and is making energy-efficient upgrades to existing equipment, there is still work to be done. This article explores how restoring, recycling, and focusing on efficiency can improve environmental responsibility, increase production capacity, and meet the growing demand for high-quality aluminium coil in North America.

The urgency for change in the global aluminium market

Traditionally, North America dominated the global aluminium market. However, production has dwindled in the last 25 years, and the region has increasingly relied on overseas sources to meet demands. Once deemed necessary as a cost-first strategy that became the precedent during the globalisation era, this shift is now being scrutinised due to environmental concerns surrounding overseas aluminium production.

While some countries prioritise environmental regulations, others do not, creating a situation where the sustainability credentials of overseas aluminium become murky.

Consequently, a global push for eco-friendly practices has led to the rise of “green aluminium” – low-carbon aluminium production that minimises environmental impact. While green aluminium surpluses currently exist, driven by a surge in production in 2023, they are not guaranteed to last forever.

Businesses need long-term assurances of stable prices and a secure supply of this sustainable material. This urgency for change underscores North America’s need to strengthen domestic aluminium production capacity, ensuring access to a reliable and environmentally responsible supply.

The North American aluminium industry

The North American aluminium industry is at a crossroads. While demand for the versatile metal is projected to surge, traditional reliance on overseas suppliers is being overshadowed by environmental supply chain vulnerability concerns. Reshoring aluminium production offers an excellent solution to this issue.

Bringing aluminium production closer to end-users strengthens domestic supply chains, minimising disruptions caused by global events. This trend, triggered by the COVID-19 pandemic and further amplified by ongoing geopolitical tensions, is gaining momentum. According to a recent survey, a staggering 69% of U.S. manufacturers have begun reshoring their supply chains, with a remarkable 94% success rate.

According to the latest data from the Reshoring Institute, whose mission is to bring manufacturing jobs back to the United States, 2023 saw near-record highs in reshoring and foreign direct investment announcements with over 287,000 newly created.

Beyond its strategic advantages, reshoring offers environmental benefits. Shorter transportation distances translate to reduced emissions and a smaller carbon footprint, contributing to a more sustainable aluminium industry. By embracing reshoring, North America can ensure a reliable aluminium supply while minimising its environmental impact.

Recycling: Aluminium’s renaissance

Aluminium’s infinite recyclability makes it the king of the circular economy. Recycling preserves the metal’s properties and offers a dramatic 95% reduction in energy consumption compared to virgin aluminium production. This solidifies aluminium as a key material for a low-carbon future.

By integrating efficient recycling practices, North America can unlock many benefits. Recycling aluminium minimises the need for virgin materials, significantly reducing the environmental footprint associated with mining and processing. This translates to cleaner air and water and less land degradation.

Furthermore, utilising recycled aluminium often proves more cost-effective than virgin resources, offering a financial advantage to manufacturers. Finally, a closedloop system for aluminium creates a reliable source of materials, contributing to increased production capacity and a more secure supply chain.

North America is uniquely positioned to capitalise on this opportunity. Boasting the world’s highest Recycling Input Rate, with 57% of its aluminium production originating from scrap, the region possesses a strong foundation for a robust circular aluminium economy. However, to fully unlock this potential, significant investments are needed. Expanding capacity for resmelting and refining recycled aluminium is crucial to meet future demand.

The automotive sector, a champion of circularity in its own right, presents a significant growth opportunity. As the demand for lightweight and sustainable materials for electric vehicles intensifies, readily available, high-capacity casting complexes in North America will be critical to meet this growing need.

A collaborative approach for lasting change in the aluminium industry

Realising a sustainable and efficient aluminium industry in North America requires a collective effort from every corner of the sector.

Industry leaders have the power and influence to be a driving force for change. Continued investment into cutting-edge technology that will enhance efficiency and minimise environmental impact can pave the way for the entire industry. Pioneering these initiatives will benefit their operations and serve as a model for others to follow, accelerating the industry’s collective transformation towards a sustainable future.

Of course, none of this is possible without the help of technology providers, the essential catalysts for efficiency throughout the aluminium production process. This includes advancements in low-carbon aluminium melting processes and technologies, like electromagnetic stirrers (AL-EMS).

This technology has proven to increase productivity by up to 25%, lower energy consumption by 10%, and reduce dross generation by 15% in more than 400 aluminium furnaces worldwide. Unsurprisingly, demand for such solutions is on the rise. Recently, GNA alutech, an aluminium furnace provider, sought to optimise efficiency, increase productivity, lower energy consumption, and help reduce operating costs and ordered four electromagnetic stirrers to do just that.

In addition to the advancements mentioned previously, technology providers also play a role in developing more efficient electrical solutions within aluminium production facilities. One promising development area is the adoption of DC (direct current) to AC (alternating
current) conversion technology. While traditional aluminium smelting relies on AC power, the conversion process itself can be energy-intensive. By implementing DC power supplies such as high-power rectifiers at specific stages of production, facilities can reduce energy consumption and minimise their overall carbon footprint.

The final piece of the puzzle is the work that governments and policymakers are doing behind the scenes, which can significantly accelerate the rate of progress. Favourable policy creates a fertile environment to capitalise on the rich industry appetite for restoring growth and sustainable technology adoption.

North America is uniquely positioned to become a global leader in clean aluminium production. Abundant natural resources, a strong foundation in recycling, and a spirit of innovation provide a solid platform for success. By embracing reshoring, recycling, and a commitment to sustainability, the aluminium industry can foster environmental stewardship and unlock significant benefits.

Increased production capacity will ensure a secure and reliable supply chain. Through collaboration and innovation, all stakeholders within the industry can work together to ensure a sustainable and secure future for aluminium in North America. This will benefit the industry and contribute to a greener, more sustainable future for the entire region.