Emissions outside the emissions trading system (ETS)

The carbon footprint of aluminum from Norðurál is among the lowest in the world. Considering the process, from the processing of raw materials to the delivery of the finished product, the carbon footprint of Norðurál’s aluminum only amounts to a quarter of the world average for aluminum production.

It can be said that environmental impacts of greenhouse gas emissions from Norðurál’s operations are twofold. On the one hand, there are environmental impacts that accompany the aluminum production process in the smelter’s potrooms. 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).

We have set ourselves ambitious goals when it comes to aluminum production itself. 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.

Norðurál’s goals are also clear when it comes to minimizing greenhouse gas emissions that fall outside the ETS system and are therefore the direct responsibility of the Icelandic government (i.e. ESR). In accordance with Iceland’s collective commitments, we set a goal that by 2030 greenhouse gas emissions outside the trading system should have decreased by at least 40% compared to the reference year 2015. At the same time, general waste for landfill must have been reduced by at least 40% by 2030 compared to the 2015 baseline.

Norðurál’s Climate Action Plan consists of 10 specific actions which will guide the company’s journey towards its goal. The plan identifies the main types of emissions generated by the company’s activities that are outside the scope of the ETS, as well as other indirect factors.

The goals that we set ourselves have already been reached, seven years ahead of time. Between the years 2015 and 2023, emissions covered by the program have decreased by 45% and landfilling of general waste has decreased by 63%. This achievement inspires Norðurál’s employees to continue their diligent work in minimizing the environmental impact of the company’s activities.

 

 

Mobile Equipment

Goal: Reduction by 820 tons of CO₂ equivalents

The use of oil in machinery and equipment generates the largest part of emissions covered by Norðurál’s Climate Action Plan. Work on the energy exchange of machines and devices in production areas is underway and has delivered good results in recent years. Since 2015, around 20 electrical mobile equipment have been put into use, both electric forklifts and electric tractors. In the near future, further replacements are scheduled along with equipment renewal. With the electrification of machines and equipment, oil consumption for these has decreased by 170,000 liters per year, which corresponds to the release of 465 tons of CO₂ equivalents.

Machinery and equipment: Actual emissions and goals

 

 

Action 1: Planning for conversion of mobile equipment to electric propulsion

Refrigerants

Goal: Reduction by 296 tons of CO₂ equivalents

The most common refrigerants used today tend to emit strong greenhouse gases and therefore contribute to climate change when the substance leaks from equipment. At Norðurál, such refrigerants are used for service cranes and tapping cranes in the potrooms, cooling systems of vehicles and electrical equipment. Since 2015, emissions due to refrigerant leaks from equipment have decreased by 83%, corresponding to 444 tons of  CO₂ equivalents.

 

Action 2: Improved data registration for refrigerant consumption

Action 3: Revising refrigerant agents

Employee Carpool

Goal: Reduction by 120 tonnes of CO₂ equivalents

A large proportion of Norðurál’s employees carpool to and from work in company cars. The carpooling significantly reduces the total number of employees’ car trips to and from work, thereby reducing indirect emissions from Norðurál’s activities. Emissions from carpooling have decreased year on year, due to the introduction of over 50 electric cars. These measures have resulted in a reduction in carbon dioxide emissions of around 120 tons or 45,000 liters of oil per year. This corresponds to a decrease of 55% since 2015. For the long term, Norðurál aims to electrify all of the company’s cars or use other renewable energy sources.

 

 

Action 4: Planning for the conversion of all of Norðurál’s cars

Employee International Air Travel

Goal: Reduction by 6 tons of CO₂ equivalents

Norðurál is an international company with partners and customers all over the world. While employee travel abroad due to their work for Norðurál is unavoidable, the company believes it is important to keep the number of flights to a minimum, for example by improving facilities for teleconferences and an improved process for approval of travel to other countries. Emissions due to employee travels increased in 2023, as a considerable number of Norðurál’s employees trained at our sister plant in Kentucky in preparation for the start-up of a new billet casthouse at Grundartangi.

Action 5: Revisions of the process of air travel approval. Employees must provide adequate reasoning for the need for overseas travel.

Recycling and Waste Disposal

Goal: Reduce disposal of general waste by 70%

Norðurál is resolute in reducing waste generation and increasing the recycling rate. Waste from Norðurál can be roughly divided into recycled waste, waste for landfill in flow pits, solid waste for landfill, materials from sewage and hazardous waste.

 

 

In 2023, 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. When it comes to production waste, we are looking for ways to further increase recycling and limit discharge into flow pits. In 2023, Norðurál and Alur aluminum processor entered into an agreement on the recycling of dross sand that is generated during the processing of aluminum slag. New equipment that Alur has purchased processes the sand so it is possible to reuse it in various productions, e.g. cement production.

Norðurál has also increasingly focused on reducing general waste from sources other than the production process and improving the recycling of that waste. For instance, in 2016 the sorting of organic waste from the canteen was launched. In 2023, the step was taken even further when separate collection of biological waste was implemented in all of the company’s break rooms.

In 2021, landfilling of mixed waste from Norðurál’s operations was stopped. Instead, the waste is compacted into pellets by a recycling center and exported, primarily to Denmark, and used as refuse-derived fuel (RDF). The energy from that process is used for home heating and electricity production, where coal would otherwise be used for the most part. The waste is therefore used as fuel instead of accumulating in landfills in Iceland with the associated emission of greenhouse gases. Still, part of the general waste from Norðurál is classified as coarse waste not suitable for energy utilization and therefore goes to landfill.

Since 2015, emissions from general waste management have decreased by 87 tons of CO₂ equivalents, which corresponds to a 62% decrease.

 

Action 6: Reduction in the use of plastic

Action 7: Identify opportunities for recycling production waste otherwise sent to landfill

Action 8: Coordinate waste labeling

Action 9: Employee education on waste and environmental issues

Society

Norðurál prides itself in a diverse and skilled group of employees. The company employs a large number of individuals with decades of experience and extensive knowledge of everything related to the production of aluminum. Norðurál considers sharing such resources with the academic community as well as the tech and innovation industry to be a part of its social responsibility. By contributing to a dynamic cooperation in this field Norðurál can support the adaption of new technologies or methods in aluminum production that result in a more efficient operation and possibly in reducing greenhouse gas emissions.

Action 10: Support of industry-related research projects

 

Emission Summary

When this plan was being created, the most important direct emission factors of our activities that fall under Iceland’s climate commitments were analyzed, as well as other indirect factors. These emission factors relate to the use of machinery and equipment, carpooling for staff, the use of refrigerants due to leaks from equipment, waste management and staff flights abroad. Annually, data from the company’s accounting is collected to assess emissions on account of these factors and the status of actions and results are reevaluated. The methodology and criteria for analyzing and evaluating emissions are detailed below.

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. In the period 2015-2023 the operation of mobile equipment stood on average for around 68% of the emissions, refrigerants for about 15%, employees’ cars and carpooling broadly 10%, general waste about 6% and international air travel by employees roughly 1%. Since 2015, emissions have decreased in all categories except for air travel, which is explained by staff training in connection with the introduction of a new production line in 2023. The largest reduction in emissions has been among machinery and equipment, by 465 tons of CO₂ equivalents or 31%. Emissions from the operation of passenger vehicles have decreased by 56% in parallel with the introduction of electric cars, and emissions from waste management have decreased by 62% after the disposal of mixed waste from the operation was stopped. It is now transferred abroad for incineration which is utilized for domestic heating and the production of hot water.

Methodology

As mentioned above, this action plan covers emissions outside the EU ETS system and primarily targets direct emissions that are included in Iceland’s emissions accounting and therefore fall under the direct responsibility of the Icelandic government towards international obligations (the Effort Sharing Regulation). In this way, Norðurál monitors how the company contributes to the fulfillment of Iceland’s international commitments.

The action plan is based on the criteria of The Greenhouse Gas Protocol, which is an international system designed to coordinate carbon accounting. The main focus was on assessing direct emissions from Norðurál’s operations. However, indirect emissions due to work-related air travel and waste handling were also assessed. Other aspects of indirect emissions, such as electricity consumption and imported goods and services, have been evaluated in the life cycle assessments of the production process. Below, each emission factor is briefly described and the methodology used for estimating the emission of carbon dioxide equivalents is explained.

Machinery and equipment:

At Norðurál’s operation site, there are machines and devices that are driven by diesel oil. Oil consumption is registered each year according to invoices from suppliers. To calculate greenhouse gas emissions, the emission factor for diesel oil from the fifth edition of emission factors from the Environment Agency in Iceland’s website was used.

Refrigerants:

At the Norðurál site, refrigerants are used for various equipment and vehicles. Every year, the use of different refrigerants due to leaks is estimated based on inventory accounting. To calculate the emission of carbon dioxide equivalents, emission factors from the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report (AR6) were used.

Employee carpool:

A large part of Norðurál’s employees carpool to and from work in company cars. The use of fossil fuels is aggregated each year according to the invoices for the purchase of diesel and gasoline. Since the largest part is in the form of diesel oil, the emission of carbon dioxide equivalents is estimated using the emission factor for diesel oil from the fifth edition of emission factors from the Environment Agency’s website.

International flights:

At the end of each year, information on the number of work-related flights by Norðurál in Grundartang’s staff is compiled by destination. Emissions are calculated using the calculator of the International Civil Aviation Organization, ICAO.

Waste:

When assessing emissions from waste treatment, landfilling of general waste and composting of organic waste are considered. General waste from Norðurál is either mixed waste that now goes to energy recovery or coarse waste that goes to landfill. To estimate emissions from landfilling of coarse waste and composting of organic waste, emission factors from the fifth edition of emission factors from the Environment Agency’s website are used. Waste sent for recycling or energy recovery is given an emission factor of 0.