We have monitored our impact on the environment for several decades as part of a holistic approach to value creation. Our climate strategy is an integral part of the overall business strategy, including reducing the environmental impact of our production activities as well as taking advantage of business opportunities by enabling our customers to do the same. Some of the measures we pursue include:
- Using viable energy sources
- Reducing energy consumption and emissions in production
- Reducing CO2 emissions through the use of our products
- Increasing the recycling of aluminium
The greenhouse gas emissions from Hydro's current consolidated activities decreased by 2 percent in 2012. The total emissions from our ownership equity - including indirect emissions from electricity generation - decreased by 11 percent. Mainly due closure of the production at the Kurri Kurri smelter in Australia during 2012, our indirect emissions decreased by 20 percent. These emissions will decrease even further in 2013 as the production at the Kurri Kurri smelter is now completely shut down. The restart of primary aluminium capacity in Neuss, Germany early in 2013, will to some degree counteract this effect.
Specific direct emissions increased slightly from 1.61 metric tons (mt) CO2 equivalents (CO2e) per mt primary aluminium in 2011 to 1.62 in 2012 following setbacks at Albras and Slovalco. Our long-term target of 1.52 mt CO2e per mt aluminium in 2013 will not be reached. Specific emissions in 2009, when the target was set, were 1.85 mt CO2e per mt aluminium.The 2013 target has been adjusted to 1.58 mt CO2e per mt aluminium, and we will in 2013 develop a new long-term target.
Our ambition is to grow faster than the market in recycling and to take a strong position in this part of the value chain. We have improved utilization of our existing capacity during the last two years, and recycled in 2012 almost 280,000 mt aluminium. Due to curtailments in remelting and recycling capacity, and divestments of two remelters, growth was only about 3 percent compared to 2011. We achieved our goal for 2012 to stabilize at above 90 percent capacity utilization in our recycling facilities. This goal is retained for 2013, due to the uncertain market conditions. We are also targeting to develop specific post-consumed scrap projects for investment in additional capacity. Following the Sapa transaction, we will in 2013 revise our long-term recycling ambitions to reflect the new portfolio.
In addition to our existing climate and recycling strategies, our environmental strategy emphasizes:
- Ecosystems and biodiversity
- Product stewardship
- Waste and efficient resource use
- Emissions
Hydro's bauxite mining involves removing topsoil and overburden by machinery to extract the bauxite deposits below. When bauxite extraction is finished in an area, rehabilitation starts. The reforestation program started in 2009 and will continue beyond 2040 in the present area. In 2012, we entered into cooperation with two other bauxite mines in Pará to share reforestation best practice. In total 609 hectares of land, including deforested areas, were affected during 2012 compared to 853 hectares in 2011. Almost 5,300 hectares have been affected since the start of the mining operations in 2006 of which 776 hectares have been reforested. In 2012 we reforested 444 hectares compared to 128 hectares in 2011. Within 2017, our ambition is to achieve an area balance of 1:1 in opening of mine compared to reforestation and to close the reforestation gap within 2020.
Enough and clean water is a challenge in some of the areas where Hydro operates. Local initiatives show that with simple measures, substantial water savings are achievable. Systematic mapping of our water situation in 2012 showed that in total, about 3 percent of our water input came from water-stressed areas when regarding annual renewable water supply. The water stressed areas where we have consolidated activities are mainly located in Germany and Southern Europe, where water supply is well regulated.
Although the Amazon is recognized for its abundance of water, we have observed over the last decades that parts of the area have had repeated periods of unusually low or high rainfall. In 2012 we initiated a study to evaluate the water balance of Alunorte and the planned CAP alumina refinery following an expansion of the Paragominas mine and construction of CAP. Today, Alunorte gets an important part of its water through the bauxite slurry that is transported from Paragominas through a pipeline.
With the new assets in Brazil, Hydro's waste production includes significant amounts of tailings from bauxite extraction as well as bauxite residue, or red mud, from alumina refining. Waste amounts are directly linked to the amount of produced bauxite and alumina. Tailings consist of mineral rejects from the extraction process mixed with water. The tailings at the Paragominas bauxite mine in Brazil are stored in dedicated tailing ponds where the particles settle. Separated water is transferred to a clarification dam before being reused in the process. There is a minor run-off to the river downstream of the tailings, which is required to maintain an ecological flow. The run-off is monitored and the water quality satisfies the requirements set by the authorities. In 2012, Hydro generated 4.2 million mt of tailings.
Bauxite residue is a by-product of the alumina refining process. Alunorte uses the Bayer process, which includes use of caustic soda. The lye is recovered and reused in the process as part of a closed-loop system to reduce production costs and lower the alkalinity of the residue. In total, 6.1 million mt (containing 35 percent humidity) bauxite residue was disposed in 2012.
Spent potlining (SPL) from the electrolytic cells used in primary aluminium production is defined as hazardous waste. In 2012, Hydro produced 25,941 mt of SPL, a 5 percent increase from 2011, but a 26 percent decrease since 2010. Production of SPL varies with the relining of smelter cells which is normally done every 4-7 years for established smelters. We expect an increase in the SPL production from consolidated smelters next year. A project to find environmentally sound and commercially viable alternatives to landfilling of SPL led to two new delivery contracts in 2012. In both cases the carbon material from Hydro will be used as a fuel in the production process, while high temperature incineration ensures destruction of hazardous components. These agreements are examples of efficient resource use that is sound for the environment by substituting fuel or raw materials and also saving landfill costs.
