Export your carbon emissions

As our global climate changes, a country’s wealth and security will be underpinned by its renewable energy resources. As countries implement their carbon emissions strategies, some will look to avoid or reduce production of energy-intensive materials by exporting their carbon emissions. Examples are aluminium, steel and other energy-intensive processes. Countries with a wealth of renewable resources can take advantage of this to boost their economies. Recent initiatives are presented here. I’ll keep adding tools to the climate emergency kit toolbox of solutions.

How can emissions be exported?

Ross Garnaut demonstrates that countries like Australia can take advantage of other nations’ needs to reduce carbon emissions¹. Energy from fossil fuels (coal, oil, etc.) is easy to transport and affordable. This is generally not the case for renewable energy, requiring direct-current cables or liquefaction of hydrogen. So, as countries choose not to use fossil fuels, they will need to import materials such as aluminium and steel, rather than importing ore and smelting these metals using fossil fuels.

Historically, countries like Australia and New Zealand have struggled to compete with the very low industrial labour costs in countries like China. Labour costs are increasing in developing countries. Automation of construction and plant operations is becoming more prevalent. The economic pendulum will swing back to countries which are rich in renewable resources.

The production of aluminium is the most energy-intensive of the metals. Australian aluminium production originally grew with cheap, reliable hydroelectric power available in Tasmania in the 1960s. Then, it grew further with cheap, accessible coal resources in Queensland, Victoria and New South Wales.

Garnault writes about Australia. Other countries with rich renewable resources such as New Zealand can benefit also. This will include those with nuclear power supplies. In fact, New Zealand’s Aluminium Smelter (NZAS) produces aluminium using alumina supplied from refineries in Queensland and Western Australia. In the 1960s, Tiwai Point was chosen as the location for an aluminium smelter for a number of reasons. The main one was the low cost of reliable energy. Aluminium smelting requires a large and very reliable power source to continually supply electricity to reduction cells. This is why Tiwai Point’s proximity to the then proposed Manapouri Hydropower Station made it an attractive location. Approximately 90% of the aluminium produced at NZAS is exported from New Zealand.

In this manner, the production of energy-intensive materials was ‘exported’ from Australia to New Zealand because it made economic sense at the time. In today’s climate change world, such opportunities will make both economic sense and ‘carbon’ sense.

Aluminium smelting results in carbon emissions from its very large demand for energy (where fossil fuels are used) – indirect emissions. Smelting also causes carbon emissions from the the smelting process with oxidation of electrolysis cathodes and anodes – direct emissions. Alcoa reports that direct emissions are typically 70-73% of total carbon dioxide equivalent emissions. Promisingly, a technology called ELYSIS has been developed jointly by Alcoa and Rio Tinto. ELYSIS will eliminate all direct greenhouse gas emissions from the aluminium smelting process. It is stated to be the first smelting technology to emit oxygen as its by-product.

The commercial advantages of smelting aluminium adjacent to alumina refining are substantial, and possible in Australia with its great potential for low-cost renewable energy [post to come]. As other countries implement their emissions strategies, causing their energy costs to increase, the export will only increase. They will want to export their carbon emissions by importing the finished product.

It is not hard to see that other examples like this could become more common as a means of reducing carbon emissions and achieving Paris Accord commitments. Japan, China or South Korea might ‘export’ the production of their metals to Australia, avoiding transport of alumina and iron ore.

Recent Initiatives

Only recently, the Fortescue Metals Group (FMG) chairman and founder, Andrew Forrest, announced that FMG are undertaking feasibility studies that could lead to some 300 GW of renewable power generation. FMG is targeting hydro-electricity and geothermal energy resources as these renewables work around the clock. FMG’s final aim is 1,000 gigawatts of zero-emissions energy.

FMG is trialling two new methods for making zero-carbon steel. The first is by replacing coal in the furnace with green hydrogen. In this process, you get steel, but instead of emitting clouds of CO₂, you produce nothing more than water vapour. To strengthen the steel, you simply add the carbon separately. It bonds into the metal rather than dispersing into the atmosphere. Andrew Forrest said that the second way to make green steel is a more radical approach. This method avoids the blast furnace altogether. “You just zap the ore with renewable electricity”. This is exactly the model that Ross Garnault foretold in his book. It is a great example of Australia’s iron ore customers exporting their steel processing-related carbon emissions.

I’ll keep adding tools like this to the climate emergency kit toolbox of solutions.

Ref 1: Garnault, R., 2019, “Super-Power – Australia’s Low Carbon Opportunity”, La Trobe University Press