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| Norsk Hydro Brazilian low carbon aluminium |
Norsk Hydro has stated that Brazilian low-carbon aluminium will likely command a premium in the global market as decarbonization efforts continue. Hydro CEO Baranov emphasized that producers using non-renewable energy sources will increasingly be excluded from the market as demand shifts toward sustainable materials. Hydro is currently not focused on a premium but acknowledges the growing importance of low-carbon aluminium in meeting global environmental targets.
The Premium Outlook for Low-Carbon Aluminium
Baranov noted that many regions, including Europe and Asia, have already moved forward with low-carbon aluminium policies, whereas Brazil is still in the early stages of discussions. According to Carlos Neves, Vice President of Hydro Bauxite and Alumina, the market will soon need to pay a premium for low-carbon alumina due to Alunorte's significant advancements in decarbonization and sustainability.
The price of low-carbon aluminium is already being assessed in multiple regions, reflecting the growing demand for transparency and sustainability in the aluminium sector. The increasing premium on low-carbon products is indicative of a broader trend in the market as sustainability becomes a key factor in aluminium pricing.
Brazil’s Role in Low-Carbon Aluminium Supply
Hydro’s Alunorte plant in Brazil has been at the forefront of sustainability initiatives. By replacing fuel oil with natural gas and installing solar panels, the plant has successfully reduced its carbon emissions by 700,000 tonnes in a year. These efforts have opened new opportunities for Hydro, strengthening its position with existing partners while attracting new ones who prioritize low-carbon solutions.
Baranov also pointed out that US tariffs under Section 232 do not currently have a significant impact on Brazil’s aluminium production. However, if Brazil were to reciprocate with tariffs of its own, it could affect the importation of natural gas from the US, which is indirectly used in aluminium production. Diplomacy, he hopes, will help mitigate such risks.
ScrapInsight Commentary
The growing demand for low-carbon aluminium aligns with global sustainability goals, pushing markets to reassess pricing structures. As Brazil increases its aluminium self-sufficiency and Hydro continues its decarbonization efforts, Brazil’s role in the global aluminium market is poised to grow significantly, potentially driving premium pricing for sustainable products.
