Transcript Document
New Zealand Aluminium Smelters Ltd Climate Change Approach Stewart Hamilton Business Improvement Manager Introduction • Business Improvement Manager • Support Business Improvement by developing operational expertise to deliver sustainable value • Move business towards strategic performance targets in Key Result Areas: • Health and Safety • People Commitment • Environment and Communities • Market Position • Operational Excellence • Financial Strength 2 NZAS – Climate Change Approach 18 July 2015 NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 3 NZAS – Climate Change Approach 18 July 2015 NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 4 NZAS – Climate Change Approach 18 July 2015 How Aluminium Is Produced 2 tonnes Alumina 5 NZAS – Climate Change Approach 1 tonne Aluminium 18 July 2015 World Aluminium Production • ~45 Million Tonne of Aluminium (Primary and Recycled) • ~350 Million Tonne of CO2-e • ~5x New Zealand Emissions Aluminium Smelter 6 Alumina Refinery NZAS – Climate Change Approach 18 July 2015 Bauxite Mine NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 7 NZAS – Climate Change Approach 18 July 2015 NZAS Rio Tinto Aluminium (79.36%) Sumitomo Chemical Company (20.64%) 8 NZAS – Climate Change Approach 18 July 2015 NZAS Operations Summary • ~20th largest Aluminium Smelter (out of 200+) • Producing 350,000 tonnes aluminium/year • Producing the highest purity aluminium in the world • Export revenue NZ$1.4bn • Using 13% of all NZ Electricity 9 NZAS – Climate Change Approach 18 July 2015 NZAS Greenhouse Gas Emissions • NZAS CO2-e Direct Site Emissions 680,000 tonne/yr Fuel 10% PFC 10% Carbon Anodes 80% 10 NZAS – Climate Change Approach 18 July 2015 NZAS Performance • Reduced absolute site CO2-e by 41% since 1990 • Top 10% Carbon Intensity of World Smelters • Top 20% Energy Efficiency of World Smelters 11 NZAS – Climate Change Approach 18 July 2015 NZAS Competitive Challenges • Reducing Emissions (technical risk) – Technical Limit to the Process – NZAS at World’s Best Practice for Cohort Group • Cost of Emissions (business risk) – Electricity represents 40% of NZAS costs – Selling on a International Commodity Market – Competitiveness at Risk • Carbon Leakage Risk – NZ Power Generation – high proportion of renewables – Net Emissions Lower from NZ Aluminium Production 12 NZAS – Climate Change Approach 18 July 2015 NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 13 NZAS – Climate Change Approach 18 July 2015 NZAS Sustainable Approach License to Operate 14 NZAS – Climate Change Approach 18 July 2015 Cost & Revenue NZAS Sustainable Approach • Sustainable Business comes from Governance in both: – License to Operate – Cost and Revenue • Systems Developed to Support a Culture of: – Attention to Detail – Procedures and Data Management – Continuous Improvement – Rewarding behaviour Aligned with our Goals and Values 15 NZAS – Climate Change Approach 18 July 2015 Approach to Technical Challenge • • • • Business Improvement Projects – Six Sigma Rigor “Adapt and Adopt” $5-15 Million per year ~ 15 Full Time Project Leaders • • • • • DC Power efficiency - Project 200 Process Carbon Efficiency – Froth Flotation PFC reduction (Anode Effects) – Process Control Fuel Combustion Efficiency Recycling of Extrusion Scrap 16 NZAS – Climate Change Approach 18 July 2015 NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 17 NZAS – Climate Change Approach 18 July 2015 Aluminium as Part of the Solution 18 NZAS – Climate Change Approach 18 July 2015 Aluminium Life Cycle • 706 million tonnes produced (since 1888) • Approx ¾ of this still used • Recycling aluminium requires 95% less energy than primary aluminium smelting 516 190 Metal Loss 19 • Recycling of aluminium today saves an estimated 84 million tonnes of CO2-e per year • Recycling the metal still in use = 15 years’ primary aluminium output Metal Still in Use NZAS – Climate Change Approach 18 July 2015 NZAS Aluminium Recycling • A cornerstone of Sustainable Practices • RTA Partnership developed with End-User Customer in NZ • 3600 tonnes of Aluminium recycled in 2006 20 NZAS – Climate Change Approach 18 July 2015 Aluminium Offset • 60-75% of vehicle fuel use is weight related • Typical aluminum parts 40-50% lighter than a comparable steel part • 1 kg of aluminium used as replacement = 20kg of CO2 over lifetime GHG Emissions from Aluminium Production versus GHG savings from Vehicle Lightweighting 600 500 GHG (Mtonnes CO2-e) 400 300 200 GHG from Aluminium Production GHG saving from Vehicle Light Weighting 100 0 1985 21 1990 1995 2000 NZAS – Climate Change Approach 2005 18 July 2015 2010 2015 2020 2025 NZAS Aluminium Offset • For other vehicles, such as trains, ferries and aircraft the potential savings are even greater • 18,000 tonnes per annum of NZAS high purity aluminium is supplied to European aerospace industry 22 NZAS – Climate Change Approach 18 July 2015 NZAS Climate Change Approach • World Aluminium Industry • NZAS Performance in the Industry • NZAS Approach – Sustainable and Technical • Role of Aluminium as part of the solution • NZAS Approach - Communities and Policy 23 NZAS – Climate Change Approach 18 July 2015 NZAS Community Approach • Energy Efficiency Extends beyond the gate… • Retrofit all Bluff homes with high quality insulation products • NZAS provide financial backing and support contractors in project safety and project management • 200 homes complete to date 24 NZAS – Climate Change Approach 18 July 2015 NZAS Policy Approach • Business as Usual is NOT an option • Short term – simple options that do not compromise long term policy – Voluntary agreement leveraging off NGA framework – Options to promote renewables and offsets • Medium to Long term – Emissions Trading Scheme – Enable lowest cost abatement - deploy low emissions technology – Design complex - Allocation principles & impact on Electricity pricing – Market mechanism to aid technology development..? • Emissions Permit Allocation – Recognition of prior action Credit for Early Action – Competitiveness at Risk 25 NZAS – Climate Change Approach 18 July 2015 Climate Change - A Business Driver • NZAS will continue to target and work on Climate Change Impacts irrespective of current policy uncertainty – Expectation that there will be a price on carbon – Set meaningful targets to reduce Energy and GHG – Incorporate in employee incentive payment scheme – Deploy strategic improvement projects – Invest in R&D to reduce the GHG intensity of our processes – Work with industry groups and governments in policy formulation – Investigate offset projects – on and off site – Promote recycling and the life cycle benefits of Aluminium usage – These approaches are almost always cost effective 26 NZAS – Climate Change Approach 18 July 2015 New Zealand Aluminium Smelters Ltd Climate Change Approach Stewart Hamilton Business Improvement Manager