The China Green Metal Certification Center (CGMC), an industry association supported by Beijing, is set to play a pivotal role in certifying low-carbon aluminium production. Since its launch in June, the CGMC has made significant strides, and it anticipates accrediting approximately 2.75 million metric tons as green this year, equivalent to 7% of the industry's production. The figure is projected to soar to 4 million tons in 2024.
China stands as the world's largest producer of aluminium, an industry notorious for its heavy electricity consumption, which can be environmentally taxing. Although coal has traditionally fueled the majority of this power in China, the sector has been progressively transitioning towards more sustainable energy sources, including hydropower and renewables.
The driving force behind this move towards eco-friendliness is the surging global demand for a greener supply chain. Notable brands such as Apple, Audi, and BMW are compelling Chinese aluminium smelters to certify that their products are low in emissions.
Ma Cunzhen, Director of the CGMC, revealed that the association has already certified 2.24 million tons of green aluminium from 28 companies, including some of the nation's largest smelters. Moreover, they are currently evaluating an additional 500,000 tons this year, a process that typically takes a week per application.
“We are seeing great responses from companies who are seeking to get the assessment as soon as possible,” Ma stated, underscoring the urgency within the industry.
Prominent industry players, such as Chalco's Qinghai unit and Henan Zhongfu Industrial's Sichuan province operation, have secured CGMC verification, according to their official websites.
The CGMC certification guarantees that the aluminium is produced using exclusively renewable energy sources like hydro, wind, or solar power. Though there is a modest premium for green-certified aluminium in Europe, Chinese smelters have yet to leverage the verification for higher pricing, according to sources in the Asian trading, banking, and production sectors.
Ma highlighted the significant environmental benefits of this shift, emphasizing that using coal-fired power for the electrolysis process generates nearly 14 tons of carbon dioxide per ton of primary aluminium in China. However, this can be reduced to under 2 tons by utilizing renewable energy sources.
The cost of a one-year CGMC certificate is a mere 2 yuan ($0.2748) per ton, a fraction of the prevailing aluminium price of 19,190 yuan per ton on the Shanghai Futures Exchange.
Looking ahead, the European Union's Carbon Border Adjustment Mechanism (CBAM), slated for full implementation in 2026, is anticipated to further propel the demand for green certification. State-supported Chinese research firm Antaike has forecasted that domestic demand for green aluminium will more than double from 5 million tons in 2022 to 12 million tons by 2030. Meanwhile, demand for green aluminium outside China is also projected to double to 3 million tons in the same period.
