Transition plan for climate change mitigation E1-1

Climate issues are one of the key focus areas for Norðurál in its strategy and future value creation. The company produces aluminum with one of the lowest carbon footprints in the world, based on the use of 100% renewable electricity, stable production processes and targeted management of greenhouse gas emissions.

• Norðurál’s carbon footprint is about a quarter of the global average regarding Scope 1, 2 and 3 in the value chain.
• Direct emissions in Scope 1 are below two tons of CO₂ equivalents per ton of production.
• The company has significantly reduced emissions of PFCs and other taxonomy-eligible carbons and the European Pollutant Release and Transfer Register (E-PRTR).
• Norðurál has achieved a 49% reduction in emissions outside the ETS compared to 2015, seven years ahead of schedule. The new target is a 55% reduction by 2030.
• The company’s aluminum production is targeted to be carbon neutral by 2040.

Climate issues

Emissions from Norðurál’s aluminum production are among the lowest known in the world. This success is achieved through quality work practices and effective operational monitoring. Emissions outside production are continuously reduced and work is carried out according to a detailed action plan and clear targets and indicators.

In accordance with the company’s policy, Norðurál is constantly working to minimize environmental impact, thereby minimizing greenhouse gas emissions. Norðurál’s performance and targets in relation to reducing greenhouse gas emissions are regularly reviewed, for instance at Sustainability Steering Committee meetings and monthly environmental meetings.

In effect, environmental impacts of greenhouse gas emissions from Norðurál’s operations are twofold. On the one hand, there are environmental impacts associated with the aluminum production process itself. Those emissions are covered by the European Union’s Emissions Trading Scheme (ETS). On the other hand, there is the general environmental impact that comes with the operation of a large company. Hence, we actually have two kinds of greenhouse gas accounting: one for the aluminum production part (the ETS part) and another for emissions from the company’s other operations – the ESR part (Effort Sharing Regulation).

Norðurál has set ambitious goals when it comes to aluminum production per se. The goal is to achieve carbon neutrality by 2040, but for that to happen, innovation and technological development are needed, as carbon emissions are an integral part of the industrial production of aluminum as it is practiced today. An important part of minimizing the carbon footprint is analyzing the aluminum’s life cycle from the acquisition of raw materials to the finished product. Engineering firm Efla has carried out a life cycle assessment of the aluminum produced by Norðurál. Such an analysis was first conducted in 2019, but now the analysis was updated with direct data from the operations of Norðurál’s largest suppliers. The analysis is based on the aluminum’s cradle-to-gate life cycle, including the production and transportation of raw materials, local emissions, and generation of waste. The environmental impact of all links in the production chain is assessed and documented. This provides a clear picture of where and how we can implement procurement and design production processes to minimize the environmental impact.

 

Description of the processes to identify and assess material climate-related impacts, risks and opportunities ESRS 2 IRO-1

Norðurál uses an integrated process to assess and respond to climate risks, in accordance with ESRS and TCFD guidelines:

• Analysis of direct and indirect emissions (Scope 1, 2 and 3) is performed regularly, based on metrics from the company’s management systems that are ISO and ASI certified.
• TCFD models and environmental factor analysis are used to analyze the impact of climate change on operations, energy security and the value chain.
• Risks assessed: impact on the supply chain, energy price volatility, emission quotas and rising carbon taxes.
• Opportunities utilized: Increased demand for low-carbon aluminum, green financing, circular innovation and supply chain traceability.

Management and responsibility

• Climate affairs are managed by the Director of Safety, Environment and Improvement and they are discussed regularly in the Sustainability Steering Group and Lead Team meetings.
• Risks are assessed as part of Norðurál’s integrated risk management (GOV-5) and ESRS disclosure requirements are part of the company’s governance system.

 

Policies related to climate change mitigation and adaptation E1-2

Norðurál’s aluminum products have one of the lowest carbon footprints in the world. Considering the whole process, from the processing of raw materials to the delivery of the finished product to customers, the carbon footprint of Norðurál aluminum only amounts to a quarter of the world average. Norðurál aspires to be the first smelter in the world to produce carbon-neutral aluminum.

The largest source of greenhouse gases from aluminum plants is the CO₂ emitted when carbon electrodes are burned in the electrolysis of aluminum. Despite best available technology, there is no other way to produce aluminum. That is why these two options are usually considered in order to reduce GHG emissions from smelters:

• Developing a new type of anode where carbon does not bond with oxygen. This would result in negligible CO₂ emissions.
• Capturing CO₂ in emissions from potrooms and tall stacks. The biggest challenge regarding this option is that the concentration of CO₂ per volume in emissions is low, or approximately the same as in the atmosphere. This makes the use of available technological solutions a challenging task.

The company’s short- and long-term strategy focuses on minimizing greenhouse gas emissions. Investment project processes take this into account, which contributes to energy transition and a reduction in the use of oil and gas in machinery, vehicles and production equipment.

 

Actions and solutions for climate issues E1-3

Norðurál has set clear and measurable goals for reducing greenhouse gas emissions and aims to be carbon neutral by 2040. To achieve these goals, the company has formulated a climate action plan. Click here to see a summary of actions related to emissions from Norðurál’s operations that fall within the scope of the Paris Agreement. The plan is updated regularly with the latest project progress and measurements.

Norðurál’s actions to reduce greenhouse gas emissions cover both direct and indirect emissions (Scopes 1, 2 and 3) and are based on the following main focuses:

• Improved energy efficiency in production processes through technological upgrades and precise control of energy consumption.
• Collaboration with suppliers to reduce the carbon footprint of resources, especially anodes and bauxite.
• Introduction of carbon pricing in operational decisions and long-term investment analyses.
• Circular solutions and redesign to better utilize raw materials and minimize waste.
• Carbon capture and research into new technologies in collaboration with the scientific community and innovation projects.
• Analysis of Scope 3 emissions and collaboration with customers and parties in the value chain to reduce indirect emissions.

 

Targets related to climate change mitigation and adaptation E1-4

Norðurál aims to become a carbon-neutral company by 2040. This goal applies to all of the company’s operations and covers direct and indirect emissions under Scopes 1, 2, and 3. Progress in climate issues is assessed annually and reviewed by Norðurál’s board and executive management. Annual progress reports are published on the company’s website and in a sustainability report in accordance with ESRS standards.

To achieve this goal, Norðurál has set measurable secondary objectives and an action plan with an emphasis on the following aspects:

• Maintain direct emissions (Scope 1) below 2 tons of CO₂ per ton of aluminum produced and continue to reduce them in line with technological advances and improvements in production.
• In the production process, to maintain the use of 100% renewable electricity (Scope 2) from hydropower and geothermal resources.
• Reduce emissions covered by the Paris Agreement by at least 55% by 2030 compared to base year 2015.
• Assess the carbon cost of all major investments and incorporate carbon pricing into decision-making.
• Implement carbon capture solutions and enhance participation in innovation projects and scientific collaboration.

 

Energy consumption and mix E1-5

All electricity in Iceland is generated from renewable and sustainable resources. Most of this electricity is used to produce aluminum from aluminum oxide, with Iceland accounting for about 2% of the global aluminum output. In 2024, Norðurál used 4,600 GWh of clean renewable energy for production, about one quarter of the electricity generated in Iceland during the year. Electrical power use per each ton of aluminum produced was 13.7 Mwh/t Al. Aluminum produced by Norðurál has one of the lowest carbon footprints available in the world.

 

Gross Scopes 1, 2, 3 and Total GHG emissions E1-6

Aluminum produced by Norðurál has the lowest carbon footprint available in the global market. The total carbon footprint – from the processing of raw materials to the delivery of the finished product – is only a quarter of the global average and about half of the European average.

The environmental impact of greenhouse gases from Norðurál’s operations can be classified into two main categories:

• Emissions from production (falls under ETS):: Direct emissions from aluminum production in potrooms fall under EU’s Emissions Trading Scheme (ETS).
• General operational emissions:: Emissions that arise from other operations, such as machinery, waste and transport. These emissions are outside the ETS and they are part of the company’s sociological impact.

Norðurál therefore maintains double carbon accounting – one covering the potrooms and the other covering general operations. Performance and actions are measured separately for each category.

 

Emissions outside the production process

As for emissions outside the production process, the oil consumption of machinery and equipment is the largest emission factor. The biggest reduction opportunities therefore pertain to energy conversion of machinery and mobile equipment.

During the period 2015 to 2024, total emissions have decreased in all categories, with the exception of air travel, which temporarily increased due to the introduction of a new production line.

Other main emission factors are:

• Machinery and equipment: Around 68%
• Refrigerants: Around 15%
• Employee car use (carpooling): Around 10%
• Mixed waste: Around 6%
• International air travel: Just over 1%

Performance in reducing emissions

The reduction in emissions from machinery and equipment was around 44% or about 650 tons of CO₂-equivalents, through energy exchange and reduced fuel consumption.

The reduction in emissions from employee carpooling was around 70% with the implementation of electric cars.

Emissions from waste management decreased by 44% after landfilling of mixed waste was stopped and instead it was transported for energy recovery abroad (incineration with heat recovery in central heating and hot water production).

 

 

 

 

 

 

GHG removals and GHG mitigation projects financed through carbon credits E1-7

Norðurál has purchased 1,100 certified Icelandic carbon credits from Yggdrasil Carbon (YGG) as part of their first certified Icelandic carbon sequestration project. The credits derive from YGG’s project at Arnaldsstaðir in Fljótsdalur, East Iceland, where spruce, pine and poplar were planted as part of the project in the summer of 2022. The carbon credits will not be active until measurements show real sequestration in the forest. It is assumed that Norðurál’s credits will be gradually actualized until the year 2072. One certified carbon credit is created when one ton of carbon dioxide, which has been measured using approved methods and certified as such, is removed from the atmosphere or is prevented from entering the atmosphere.

 

Internal carbon pricing E1-8

Greenhouse gas emissions directly linked to the production process of Norðurál fall under the scope of EU’s emission trading system (ETS). Its aim is to reduce emissions from the production processes of major industrial concerns in Europe, where companies must purchase emissions allowances. The trading system therefore functions as an economic incentive for industrial concerns like Norðurál to reduce emissions.

 

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities E1-9

Climate change can reduce access to raw materials or reduce the quality of raw materials. Climate change can cause disruption to the supply chain of raw materials. Extreme weather conditions (severe frost/extreme heat/storms/floods/rise in sea levels) can cause damage to property, which can reduce the quality of production and production capacity. Droughts affect the water level in the highlands and thus the availability of renewable electricity. All of these factors can have a significant financial impact on Norðurál’s operations.

 

Policies related to pollution E2-1

Norðurál’s environmental policy describes the company’s ambition to minimize all types of emissions, whether to air, water, sea or soil. Environmental impact is part of the risk assessment in connection with investment projects and Norðurál’s operating procedures take into account the minimization of environmental impacts. Clear operating procedures, their application and monitoring of emissions ensure that Norðurál’s operations are in harmony with the environment and society. The company’s environmental risk analysis addresses risk factors related to all types of emissions and how such emissions are managed and minimized. Responses to acute pollution are defined in the company’s emergency response and evacuation plan.

Norðurál’s operating permit is issued by the Icelandic Environment Agency (UST) and is accompanied by detailed requirements for internal and external monitoring. While internal monitoring is defined in a measurement plan that accompanies the operating license, external monitoring is described in a separate monitoring plan approved by the Environment Agency.

 

Description of the processes to identify and assess material pollution-related impacts, risks and opportunities ESRS 2 IRO-1

Norðurál has implemented integrated, certified processes for identifying and assessing environmental impacts, risks and opportunities related to pollution and other sustainability aspects. The processes are part of the ISO 14001 certified environmental management system and integrated with the company’s overall management.

Environmental factor analysis

• Norðurál conducts a systematic environmental aspect analysis where all aspects of the operation are assessed based on the scope, severity and likelihood of negative impacts.
• The environmental aspects that are considered risky or involve significant challenges are defined as significant environmental aspects and are subject to annual review and prioritization of actions.
• Other aspects are reassessed at least every three years.
• The analysis is carried out with the active participation of managers and employees from all key departments.

Consultation and participation of employees

• The process is based on consultation and multidisciplinary assessment within the company and includes the involvement of experts, managers and employees in operations and production.
• This ensures that insight into daily operations is utilized for risk assessment and the identification of improvement opportunities.

Feedback system and notification of environmental incidents

• Norðurál operates a feedback system where employees can record deviations, incidents or improvement opportunities related to pollution or other environmental risks.
• The feedback is analyzed and the appropriate improvement process is subsequently initiated.
• Field inspections, environmental reviews and regular monitoring of emissions and environmental aspects are part of the daily work of experts and managers.

Objectives and improvements

• Results from environmental factor analysis and recommendations are used to formulate measurable goals, improvement projects, and manage the prioritization of actions.
• In this way, Norðurál ensures that environmental policy and pollution management have an actual impact on the company’s daily decisions and long-term strategy.

 

Actions and resources related to pollution at Grundartangi E2-2

Norðurál actively participates in environmental monitoring of the industrial area at Grundartangi, which has been carried out continuously for over a quarter of a century. The area has been referred to as one of the best studied in Iceland in terms of the environmental impact of industrial activities. Environmental monitoring is an important part of the company’s environmental management and supports Norðurál’s goal of ensuring that the company’s operations are in harmony with the local environment and society.

Independent parties monitor the parameters in air, sea and freshwater, as well as the effects on livestock and vegetation, in accordance with the approved monitoring plan linked to operating permits and approved by the Environment Agency of Iceland.

The scope of environmental monitoring in 2024 covered about 130 sampling points, where around 460 samples were collected and analyzed. Studies for environmental monitoring were carried out by the Marine Research Institute’s Chemical Analysis Department, the Mosfellsbær Veterinary Clinic and other independent parties. Around 80 parameters were analyzed in the samples.

Data and results show that the pollution load from the activities at Grundartangi is insignificant and within acceptable limits. Measurements show that gaseous fluoride (HF) in the atmosphere was above the limit values at the air quality station by Kríuvarða, but all other criteria set in operating permits and regulations for air quality, freshwater, sea, hay and grass were met. Icelandic reference values for precipitation, vegetation (leaves and needles) and herbivores are not defined. Fluoride concentrations in vegetation were in all cases below the tolerance limits for vegetation. Fluoride in hay proved to be below the tolerance limits for herbivores and under the maximum value in feed for sheep. Results for sulfur in hay was comparable to other studies that have been conducted on sulfur content. Although the average concentration of fluoride in the jaw bones of sheep has increased in comparison with 1997, it is unchanged compared to 2007. There does not appear to be a clear relationship between the dental health of slaughter animals and the concentration of fluoride in the jawbones. There were no detectable effects of fluoride on the teeth or joints of live sheep and horses.

The companies involved in the environmental monitoring in Grundartangi are Norðurál at Grundartangi, Elkem Ísland, and Alur aluminum processor. Part of the measurements are accessible in real time on the website of the Icelandic Environment Agency, ust.is. An extract of the results for 2024 is here and the report for 2024 is available by clicking here.

Internal monitoring

Internal monitoring of Norðurál’s environmental issues is carried out according to the operating license measurement plan. Fluoride, dust and sulfur dioxide emissions from the potrooms and scrubbers are monitored through continuous measurements and annual comparison measurements by external parties. Emissions from smaller dust sources are also monitored regularly.

Continuous measurements of scrubber stacks and pothouse room framework are automatically recorded and monitored. Managers and employees on shifts thus receive a message immediately if emissions turn out to be above defined internal standards. This makes it possible to shorten response times and minimize emissions.

On the Norðurál site, there are oil separators and sand traps where applicable that clean surface water which flows to the sea. The total flow of surface water and wastewater to the sea is not measured, but quarterly measurements are made of the concentration of substances in outlets from Norðurál’s site. An analysis of oils in cooling water from rectifiers and the casthouse is carried out twice per year. Verkís Engineering monitors the sewerage for fluoride, aluminum, suspended particulates, and oil or grease. Chemical analyses of cooling water are carried out by the University of Iceland’s Pharmacology and Toxicology Research Institute.

 

Targets related to pollution E2-3

Norðurál has set clear goals to minimize the release of pollutants in accordance with the company’s environmental policy and statutory requirements. The two most important environmental factors, fluoride emissions and dust contamination, are continuously monitored and followed up with daily, weekly, monthly and annual measurements.

Fluoride

Fluoride emissions are measured both at the potrooms and in the scrubbers.

Fluoride emission targets are defined both as operating permit limits and as internal targets.

In 2024, the fluoride emission target was achieved as it decreased from the previous year.

Dust

Dust contamination is analyzed through air quality measurements in the potrooms and from the scrubbers.

Whereas dust contamination exceeded the internal target in 2024, it was still within the permissible limits according to the operating permit.

Continuous monitoring and improvement

Emission targets vary by stations and circumstances, but they are all part of an approved process according to the ISO 14001 environmental management system.

Results are compiled regularly and presented to managers and employees, with the aim of identifying deviations and implementing improvements.

 

Pollution of air, water and soil E2-4

Results from internal monitoring of emissions to air, water and soil can be found in the table on Norðurál’s Green Accounting and in the environmental monitoring report for the industrial site at Grundartangi. See more in the section on Norðurál’s Resource inflows, E5-4 below.

 

Substances of concern and substances of very high concern E2-5

Emissions of fluoride, dust, sulfur dioxide and greenhouse gases from production processes are classified as substances of very high concern in Norðurál’s operations. Emissions of these substances are provided in the table on the company’s Green Accounting as total emissions and as emissions per production unit. See more in the section on Norðurál’s Resource inflows, E5-4 below.
 

Anticipated financial effects from pollution-related impacts, risks and opportunities E2-6

If an environmental incident occurs which results in environmental pollution, it will involve costs for minimizing the extent and impact and possible mitigation measures. Responses to environmental incidents are defined in Norðurál’s emergency response plan.

 

Policies related to water and marine resources E3-1

Norðurál’s environmental policy emphasizes that the company’s operations are in harmony with the environment and that continuous efforts are made to minimize environmental impacts. The objective of minimizing emissions includes emissions to water and sea. Regular measurements of wastewater, fresh water and sea are carried out as part of the measurement plan and environmental monitoring. The results are compared with limits in the operating permit, regulations and background measurements to assess potential loads.

 

Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities ESRS 2 IRO-1

The investment project process includes an assessment of environmental aspects and efforts to minimize emissions to the sewer is part of that assessment. The procedures for routine work also take into account the analysis of environmental aspects. In this way, procedures are managed to minimize the release of substances into the sewer or into the air that can reach nearby water bodies. Risk assessments are carried out for other projects where preventive measures are defined regarding the use and release of substances and waste management.

Construction projects that may affect water quality are assessed in accordance with the Water Management Act and an impact assessment is carried out for the relevant water body. The operation of flow pits is also based on a risk assessment that takes into account discharges to the sea.

 

Actions and resources related to water and marine resources E3-2

On the Norðurál site, there are oil separators and sand traps where applicable that clean surface water which flows to the sea. The total flow of surface water and wastewater to the sea is not measured, but quarterly measurements are made of the concentration of substances in outlets from Norðurál’s site. An analysis of oils in cooling water from rectifiers and the casthouse is carried out twice per year.

Verkís Engineering monitors the sewerage for fluoride, aluminum, suspended particulates, and oil or grease. Chemical analyses of cooling water are carried out by the University of Iceland’s Pharmacology and Toxicology Research Institute.

The investment project process includes an assessment of environmental aspects, and minimizing discharges to the sewer is part of that assessment. The operating procedures for regular operations also take into account the analysis of environmental aspects. In this way, the procedure is managed to minimize the release of substances into the sewer or into the air that can reach nearby groundwater, surface water or sea. A risk assessment is carried out for other projects, where preventive measures are defined regarding the use and release of substances and waste management.

Construction projects that may affect water quality are assessed in accordance with the Water Management Act and an impact assessment is carried out for the relevant area. The operation of overflow pits is also based on a risk assessment that takes into account discharges to the sea.

According to a risk assessment carried out on the basis of Act No. 33/2004 on the prevention of marine and coastal pollution, only oils in the Norðurál area fall under the definitions listed in Annex II to the Act and result in acute pollution of the sea or coasts. If an emergency pollution risk arises within the Norðurál smelter in Grundartangi that could cause a hazard outside the smelter site, an emergency management team must be summoned. The team is responsible for coordinating Norðurál’s response and that from external response parties. Norðurál has procedures in place for preventive monitoring of oil traps, oil tanks and hydraulic systems to minimize the risk of oil spills.

 

Targets related to water and marine resources E3-3

Norðurál monitors water consumption in its systems and has defined warnings on responses if deviations from abnormal use occur. Water consumption is generally fairly stable between years, as can be seen in the company’s green accounting. Norðurál’s objectives are that all measurements of sewage, fresh water and sea water are always within defined reference limits to protect the ecosystem. If deviations occur, they are recorded in a feedback system, a root cause analysis is carried out and preventive measures are implemented to prevent recurrence.
 

Water consumption E3-4

Water supplied to Norðurál comes from the Tunga and Hlíðarfótur springs in Svínadalur valley. Fresh water consumption in 2024 amounted to approximately 171,117 m3. Thereof, potable water accounted for 68,447 m3 and water used for production was 102,670 m3. The rectifier cooling system uses about 7,884,000 m3 of sea water each year.

• Circulated seawater in the rectifier cooling system is by far the largest part of water consumption
• Industrial water (freshwater) amounts to about 1.3%
• Drinking water (freshwater) amounts to about 0.8%

 

Anticipated financial effects E3-5

If an environmental incident occurs which results in the pollution of ground water, surface water or sea, it would involve costs for minimizing the extent and impact and possible mitigation measures. Responses to environmental incidents are defined in Norðurál’s emergency response plan.

 

Environmental monitoring E4-1

Norðurál actively participates in coordinated environmental monitoring at Grundartangi to monitor the impact of industrial activities on the area’s biota and ecosystem. The monitoring is carried out according to an environmental monitoring plan approved by the Icelandic Environment and Energy Agency and valid until 2028. The main results show that the impact of industrial activities at Grundartangi on the area’s biota is small and generally within the limits set in the operating permits.

The environmental monitoring is a collaborative project between Norðurál Grundartangi ehf., Elkem Ísland ehf. and Alur Aluminum and is based on a risk assessment with the involvement of stakeholders and experts in the field. Its aim is to assess the actual impact of industrial activities on the natural environment and ensure that operations are in accordance with nature and the local community.

Monitoring includes the following environmental aspects:

• Climate and air quality
• Freshwater
• Vegetation, mosses and lichens
• Hay quality and pastures (sheep and horses)
• Sea and marine sediments, including marine life at the Grundartangi flow pits

Each monitoring aspect has defined measurement parameters and monitoring frequency. Data recording aims to identify whether the impact of the companies’ operations exceeds the limits of operating permits or regulations and whether long-term effects on nature or the ecosystem can be identified.

A more detailed discussion of environmental monitoring can be found in section E2-1.

 

Policies related to biodiversity and ecosystems E4-2

Norðurál emphasizes that its operations are conducted in harmony with the environment. Continuous efforts are made to minimize environmental impacts and sustainably utilize energy and raw materials. This means that the operations do not have a negative impact on the ecosystem and biodiversity.

Norðurál’s operations have undergone an environmental impact assessment in accordance with the Environmental Impact Assessment Act. The assessment provides a detailed account of assessment factors related to the responsibility to maintain and promote biodiversity, such as vegetation and soil, wetlands, wildlife, land use, water, shoreline and sea.

 

Material impacts, risks and opportunities related to biodiversity ESRS 2 SBM-3

The main risks related to adverse developments in biodiversity are reputational risk and possible enforcement actions by regulators if such developments are the responsibility of the company.

The main opportunities related to the protection and positive developments in biodiversity relate to the restoration of wetlands. By promoting the restoration of wetlands, Norðurál can have a positive impact on the ecosystem and habitat of many plant and animal species. These actions bind carbon in the soil over time, which Norðurál could use as a mitigation measure against greenhouse gas emissions.

Norðurál’s operations may have indirect impacts on ecosystems and biodiversity in the local community. Although direct loads on nature from operations are limited according to monitoring data, it is important to identify and respond to risks that may be related to reputation and regulatory requirements, as well as to utilize opportunities for positive impacts.

 

Description of the processes to identify and assess material impacts, risks and opportunities related to biodiversity ESRS 2 IRO-1

Norðurál regularly identifies and monitors the impacts of its operations on biodiversity through structured processes in accordance with the company’s environmental management system (ISO 14001) and applicable operating permits. The main process supporting this analysis is the joint environmental monitoring of the industrial site at Grundartangi, which has been carried out continuously for a quarter of a century.

The results of environmental monitoring are reviewed as results com in from independent experts who are responsible for the analysis and interpretation of the results. The monitoring results are also reviewed annually in consultation meetings with the Icelandic Environmental and Energy Agency, the Hvalfjörður municipality and the West Iceland Health Inspectorate. In addition, open briefing meetings are held annually in the local community where the results are reviewed and an opportunity is provided to submit comments. The environmental monitoring plan is reviewed regularly and changes are made, if necessary, in consultation with stakeholders.

 

Actions and resources related to biodiversity and ecosystems E4-3

Norðurál operates a standardized environmental management system in accordance with ISO 14001, which ensures that the company’s operations are in harmony with nature and the ecosystem in the smelter’s operating area. The system includes integrated management and clear processes that cover both daily operations, regular maintenance and new construction by the company.

Main focuses of Norðurál’s actions:

• Implementation of protective procedures: Processes in investment projects and maintenance work take into account avoiding disruption of sensitive ecosystems and minimizing the impact on the biosphere in the vicinity of the smelter.
• Cultivation and land restoration: Areas disturbed by construction are covered with vegetation to promote the restoration of vegetation cover. Norðurál has also supported forestry in the vicinity of the smelter as part of increasing biodiversity.
• Design and appearance of structures: Emphasis is placed on ensuring that buildings and structures fit well into the environment and landscape. Special attention has been paid to color selection, appearance and location with regard to the visual impact on nature and the coastline of Hvalfjörður.
• Minimization of noise and light pollution: Technical and operational measures have been implemented to keep noise to a minimum. Lighting has also been controlled to have the least impact on the surrounding area and wildlife, for example by using direct and subtle lighting instead of overhead lights.

 

Targets related to biodiversity and ecosystems E4-4

Norðurál’s main objective is that the company’s operations do not have a negative impact on the ecosystem in the vicinity of the smelter and that all operations are within the limits defined in operating permits and applicable environmental legislation. Environmental monitoring of the industrial area at Grundartangi is a key tool in following up on these objectives. It includes regular measurements of the ecosystem and environmental conditions in the area and covers air quality, freshwater, sea, flora and fauna. Norðurál’s goal is that all reference values are met to ensure the protection of the ecosystem.

The results of environmental monitoring at the Grundartangi industrial site for the year 2024 are compared with:

• Reference values in operating permits and regulations,where they exist.
• Baseline measurements from 1997, which provide a reference for the natural state before the start of operations.
• Long-term comparison between years, which shows the development of environmental factors since all the smelter’s pots were started up in 2007.

 

Impact metrics related to biodiversity and ecosystems change in Grundartangi E4-5

The main environmental monitoring indicators for the Grundartangi industrial site, as defined in the environmental monitoring plan approved by the Icelandic Environment and Energy Agency, relate to the impact of industrial activities on the ecosystem and the natural environment on land, in water and at sea. They include the following aspects:

Air quality

• Atmosphere: Fluoride in air and dust, sulfur dioxide in air and dust, particulate matter, PAHs in particulate matter, nitrous oxide and hydrogen sulfide
• Precipitation: Chloride, nitrate, sulfur sulfate, fluoride, pH, sodium and calcium

Freshwater

• Chemical composition of river water (pH, conductivity, fluoride, chlorine, sulfur sulfate, sodium and calcium)

Sea and marine sediment

• Quantity of metals, cyanide, fluorine and phosphorus in seawater at flow pits
• Biological aspects of mussels
• PAHs and inorganic trace elements in mussel soft tissue
• PAHs in marine sediments

Vegetation

• Vegetation changes in lichens and mosses, sulfur and fluoride in lichens (which are sensitive and good long-term indicators)
• Vegetation changes in peatlands
• Fluoride (in plant tissue and from the surface) in grass, leaves (birch, spruce) and conifers (spruce, mountain pine, shore pine)
• Fluoride and sulfur in hay

Fauna

• Fluoride in the jaws of slaughtering sheep and the condition of teeth and jaws
• Condition of teeth and joints in live sheep
• Condition of teeth and joints in live horses

Meteorological measurements and local distribution models

• Wind speed and direction
• Precipitation and climate conditions
• Data collection to analyze the diffusion of pollutants

 

Anticipated financial effects E4-6

If an environmental incident occurs that may result in a potential adverse impact on the ecosystem and biodiversity, it would involve costs for minimizing the extent and impact and possible mitigation measures. Responses to environmental incidents are defined in Norðurál’s emergency response plan.
 

Policies related to resource use and circular economy E5-1

Norðurál places a primary emphasis on minimizing environmental impact and using raw materials and energy in a responsible manner. This involves minimizing waste generation and seeking ways to fully utilize the value inherent in the waste that is generated in the spirit of a circular economy.

The huge advantage of aluminum is that it can be recycled almost infinitely, and 75% of all aluminum ever produced is still in use. Aluminum’s properties therefore fit well with society’s demands for increased value circulation.

 

Actions and resources related to resource use and circular economy E5-2

Waste from our operations can be categorized as recyclable materials, non-recyclable industrial waste sent to coastal flow pits, solid waste sent to landfill, sewage, and hazardous waste.

Íslenska gámafélagið (the Icelandic Waste Association) is the waste collection service provider for Norðurál in Grundartangi. Their employee oversees the collection of waste from receiving stations in the production area. Waste is collected in a container area where it is further sorted. Landfilling of mixed waste was discontinued in the spring of 2021. What remains is incombustible coarse waste that cannot be used for energy recovery. Work will continue to minimize the generation of waste and find other alternatives for the disposal of coarse waste materials.

There are sorting stations in Norðurál’s canteens and operating areas for plastic, paper, general waste, and, where applicable, hazardous waste. Nowhere should there be only one bin for unsorted or general waste, neither in offices nor in the production area. There shall always at least three bins standing together so sorting can take place.

Employees in each area are responsible for emptying these bins at the reception points shown in the overview. The reception points receive the categories of waste that is generated in each area. Waste collection staff are responsible for collecting waste from the reception points and transporting it to the company’s waste sorting area. In the waste sorting area, waste is sorted further when appropriate and its volume reduced to minimize transportation.

Norðurál’s action plan lists actions aimed at minimizing waste generation and maximizing value from waste. The actions are as follows:

•  Action 6: Reduction in plastic use 
•  Action 7: Identify opportunities for recycling production waste; otherwise sent to flow pits 
•  Action 8: Coordinate waste labeling 
•  Action 9: Staff education on waste and environmental issues 

 

Targets related to resource use and circular economy E5-3

In 2024, almost 80% of the waste generated by Norðurál’s operations was recycled. A major part of that is production waste such as anode butts and coke. Emphasis has been placed on recycling and reducing general waste. As an example, organic waste from the canteen, which is treated by SORPA Waste Disposal Company, becomes a nutrient-rich soil supplement and methane gas.

Norðurál’s goals and metrics that contribute to a circular economy are also reflected in the company’s climate action plan. Norðurál’s goal is to reduce landfilling of general waste by 70% between 2015 and 2030. Between 2015 and 2024, landfilling of general waste has decreased by 44%.

 

Norðurál’s resource inflows E5-4

Norðurál manages its resource use in accordance with environmental information regulations and publishes the results annually. This includes a detailed listing of the main inputs and raw materials used in the company’s operations. Norðurál’s Green Accounting can be accessed here.

The main resources that are classified as resources in Norðurál’s operations include:

• Electricity from renewable energy sources (hydropower and geothermal energy)
• Fresh water and industrial water for production
• Raw materials: alumina, anodes, fluorine, silicon and other materials used in aluminum production
• Auxiliary materials, packaging and other materials used in the processing and transportation of products

 

Resource outflows E5-5

Norðurál manages all emissions and waste generated by the company’s operations in accordance with environmental information rules. This data is published annually and provides a comprehensive overview of the release of resources from the company’s operations, both in the form of waste and emissions. Numerical information and a summary can be found in Norðurál’s Green Accounting.

Main categories include:

• Solids: Inert waste, combustible waste, hazardous materials, anode butts, etc.
• Liquids:Coolants, oils and chemical fluids
• Gases: Emissions of greenhouse gases and other air pollutants according to defined criteria

 

Anticipated financial effects from pollution-related impacts, risks and opportunities E5-6

The circular economy can have a positive impact on Norðurál’s operations through improved utilization of raw materials and full utilization of the values inherent in the waste that is generated. The cost of waste disposal can thus be reduced through improved utilization and better waste management.

Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities ESRS 2 IRO-1

Norðurál keeps and publishes its Green Accounting covering all aspects of its operations. The company’s goal is to utilize all raw materials to the greatest extent possible, and to report in detail how we dispose of all undesirable substances. Green accounting improves environmental culture, increases caution in handling unwanted materials, makes it easier for employees to explore new ways to minimize emissions and waste, and encourages responsible treatment of raw materials and the local environment.

The Green Accounting dates back to 2003 and clearly shows that we have achieved significant success in all areas: This applies to everything from improved utilization of raw materials to the recycling of organic waste in the canteen.

Norðurál has had a life cycle assessment carried out on the aluminum produced by the company. The analysis is based on the aluminum’s cradle-to-gate with end-of-life scenario life cycle, including the production and transportation of raw materials, local emissions, and generation of waste, as well as the shipping of the final product to the European market. The results of the life cycle analysis provide useful insight into the value chain of Norðurál’s aluminum production and where opportunities lie to contribute to minimizing environmental impacts.