This includes 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:
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Using viable energy sources
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Reducing energy consumption and emissions in production
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Reducing CO2 emissions and energy consumption through the use of our products
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Increasing recycling of aluminium
Renewable energy is our preferred choice. About two-thirds of the electricity used in our primary aluminium production is from renewable sources, and we are the second-largest hydropower producer in Norway with normal production of 9.4 TWh per year. In 2011, we produced 9.6 TWh.
Increased total emissions - reduced emissions per ton
The Qatalum aluminium plant, in which we own 50 percent, came into full production in September 2011. The plant uses natural gas as its energy source. The International Energy Agency recognizes natural gas as an important energy source that can help reduce global temperature increases. In addition, the use of natural gas in Qatalum is an efficient way of utilizing local energy sources. In Brazil and Australia, we use power from the grid. The grid in Brazil is mainly supplied by hydropower, while the grid in Australia is mainly supplied by coal power. At Alunorte and Paragominas in Brazil, the main energy sources are fuel oil, coke and diesel.
The greenhouse gas emissions from Hydro's current consolidated activities decreased by 5 percent in 2011, compared with 2010. After Qatalum moved into into full production, total emissions from our ownership equity - including indirect emissions from electricity generation - increased by 10 percent. Due to our new assets in Brazil, our direct greenhouse gas emissions from consolidated activities increased by 4.5 million metric tons compared to the figures reported in Hydro's annual report 2010.
In 2009, we revised our goal to a specific direct emission of 1.52 mt CO2e per mt aluminium in 2013. With a performance of 1.61 mt CO2e per mt aluminium last year excluding newly acquired Albras, we are approaching this target. The improvement represents a net annual reduction of more than 200,000 mt CO2e compared to 2009, when the specific emissions were 1.85 mt CO2e per mt aluminium.
Energy-efficient cost savings
Energy efficiency is an important part of Hydro's 300 USD/mt cost-saving program. On average, our fully-owned primary aluminium plants consumed 13.79 kWh of electricity to produce one kilogram of aluminium in 2011, an improvement of 0.09 kWh/kg aluminium. This equals an annual energy reduction of more than 80 GWh from 2009. Our HAL4e technology, which we are testing in full scale, has achieved an energy consumption of 12.5 kWh per kg aluminium. We have initiated a program to widely pilot innovative technology solutions, which when implemented, will have the potential to reduce the energy consumption for all our primary metal plants by 200-400 GWh on an annual basis. These pilots are in the planning process and will be started in 2012.
Working with customers
We work closely with customers to develop products that save energy and reduce emissions. Aluminium façades can lead to lower operating costs and enable buildings to produce as much energy as they consume during operation. Hydro has built xx buildings that aim to be energy neutral during operation. Hydro's test center in Bellenberg, Germany, produced 9,686 KWh more energy than it used in 2011. This equals a self sufficiency of 126 percent.
Lighter cars result in fuel savings and lower emissions on the road, and lighter aluminium products and packaging reduce transport costs and emissions. Excellent barrier properties reduce the cooling needs of food products while improving durability, thus reducing food spoilage. In 2011, Hydro became one of 12 sponsors of SAVE FOOD, an initiative from the United Nations' Food and Agriculture Organization. Our specific contribution is packaging, in which aluminium helps to conserve food more effectively so it stays fresh longer with less cooling and is better protected for transport and storage. This helps reducing emissions in the food supply chain and in the consumption of beverages.
We are currently upgrading several of our hydropower plants in Norway to secure future stable production. The Rjukan watershed, with a total annual normal production of 3 TWh from five plants in the Måna river, is the largest upgrade with an estimated cost above NOK 800 million. The project is expected to be completed in 2015. We are also working on increasing the production further within current assets. When finalized in 2012, the refurbishment of the Holsbru and Herva plants and construction of the Vasstøl plant, will increase the potential electricity output by 150 GWh per year.
We support the development of international frameworks on climate change and greenhouse gas emissions and participate actively in organizations such as the World Business Council for Sustainable Development and the International Emissions Trading Association, to provide business solutions to climate change. In addition, we work through aluminium associations to establish a level playing field globally for aluminium production.
Optimizing transportation
As an energy-intensive industry, climate-gas emissions from the transportation of raw materials and products is estimated to constitute less than 5 percent of Hydro's total emissions. Still, it is important to continue reducing these emissions. As an example, Hydro's rolled products business leverages several concepts to secure customer-oriented logistics at lower CO2 emissions and less cost. One is to use trains or ships for long distances, trucks for shorter distances. One project (Germany-Spain) has been calculated to save around 260,000 km driven per year. The business also uses a multi-drop concept to serve more customers from one truck and then reverse the logistics, which brings finished material to the customer and returns with scrap. A similar approach is used in e.g. Hydro Building Systems.
Cooperating to save energy
Enova is a Norwegian governmental organization founded to promote environmentally friendly restructuring of energy generation and consumption. Enova is co-funding Hydro projects to develop more energy-efficient production processes. These projects are an important part of Hydro's efforts to reduce specific energy consumption from new and existing plants. If successful, the technology could be used outside Norway and, in some cases, outside Hydro. One example is a project to increase heat recovery in the metallurgical industry. Enova's support makes it possible to carry out projects that have a higher business risk than we usually allow for. In 2011, Enova contributed NOK 3.4 million to Hydro. See also interview with Nils Kristian Nakstad, CEO in Enova.
For detailed information about Hydro's greenhouse gas emissions and energy consumption, see Hydro's Annual Report 2011 (PDF / 10mb) page 77.
