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HYDRO’S APPROACH TO SUSTAINABILITY Hans Erik Vatne CTO, Norsk Hydro 1 About the Presenter • Hans Erik Vatne, PhD – Senior Vice President and Chief Technology Officer – Head of Corporate Technology Office, Norsk Hydro – BoD, NTNU Faculty of Natural Sciences – BoD, Research Council of Norway Portfolio Board • [email protected] • Twitter: @HansErikVatne 2 Contents • Introduction: • Hydro’s approach to sustainability – Hydro in brief – Bauxite and alumina – Global sentiment – Primary aluminium – Hydro’s sustainability targets – Casthouse area and recycling – Product development 3 4 Building industries that matter A leading industrial company with basis in renewable energy and aluminium • Global provider of aluminium raw materials, products and solutions and of renewable energy • First-class operations within renewable energy, raw materials, primary aluminium metal, rolled products, extruded solutions and recycling • 34,000 employees at 140 locations in 40 countries • Market cap ~USD 9 billion (as per January ‘21) • Annual revenues ~USD 15 billion (2020) • Included in Dow Jones Sustainability Indices, Global Compact 100, FTSE4Good 4 Introduction Strong increase in sustainability, environment and climate awareness Action and improvement needed on waste, recycling and emissions (CO2) to defend aluminium’s position 5 Sustainability challenges and opportunities in the aluminium value chain 6 Hydro’s 2030 sustainability targets Social responsibility Environment Climate • 1:1 rehabilitation Strengthening local • Tailings dry backfill Cut CO2 emissions communities and our • Utilize 10% of bauxite residue by 30% business partners • 50% reduction in key non-GHG air emissions Sustainability in the marketplace: our greener products portfolio 7 8 Tailings dry backfill in operation 8 9 Bauxite residue: from waste to products Steel Industry Agriculture Civil Construction Oil and Gas • Alternative iron ore • Soil conditioner • Cement, concrete, • Proppant aggregates, • % Utilization*: 20 • % Utilization: 10 • % Utilization: 20 components, pavers TMS Light Metals Award (2021) • % Utilization: 50 % Utilization (potential) = used BR (ton) / total generation (ton) 9 10 Cement industry with largest potential 10 11 Sources of Hydro’s 15 Mt CO2-emissions Hydro′s certified 4.0 low-carbon aluminium Fossil fuel combustion; 1,6 Process Other* emissions; 3,2 Fuel switch Fossil fuel combustion; 3,7 Alunorte ? Al CO2/kgMaximum kg4.0 Electricity production; 6,4 Emission data is as reported in Hydro annual report for 2017 with Extruded Solutions emissions included. Graphic: Breakdown of emissions of in the total Hydro value chain, including Extruded Solutions * Casthouses, re-melting, anode baking, furnaces etc 11 12 Alunorte fuel switch project Converting boilers and calciners to natural gas, LNG 12 1 3 Primary aluminium production can come under pressure All energy sources need to be based on renewable energy kg CO2e/kg Forecast 13 Electrolysis climate technology roadmap Build on the Hall-Heroult process Intermediate phase: New technology in «new» plants: and existing plants: • Conclude on viability of R&D work • Inert anodes • Convert to renewable power • Continue power conversion • Chloride/other innovative processes • Optimise operations • Further optimising operations • CCUS and DAC solutions • Energy consumption • CO2 capture and storage or utilization, CCUS • Industry 4.0 • DAC solutions • Broad portfolio R&D incl. bio carbon Towards 20202050 2035 Zero 2050 14 Energy consumption – Karmøy tech pilot Successful validation test: EC < 12.4 / 11.8 kWh, CO2 < 1.4 kg – technology element deployment 15 Towards autonomy Digital twins Set Points Inputs Measurements Cell controller Cell Measurements Tb_est Cfl_est Inputs Measurements Process data Estimated Model outputs update ALMIN Model Estimator Domain competence Optimizing production by combining: • Physics-based models • Sensor data • Advanced analytics algorithms A new approach to the chloride process Al2O3 3CO Aluminium chloride production CO2 to CO conversion e.g with hydrogen: 3CO2 + 3H2 = 3CO + 3H2O or electrolysis: 3CO2 = 3CO + 1.5O2 3Cl2 3CO2 2AlCl3 Aluminium chloride electrolysis 2Al 17 Carbon capture from electrolysis A medium to longer term solution towards zero-CO2 Hall-Héroult electrolysis • Direct Air Capture (potentially utilizing waste heat from electrolysis or off-site) • Off Gas Capture utilizing waste heat from electrolysis 18 Recycling - a part of the solution Aluminium’s recyclability is a fantastic competitive advantage 5% 75% 100% to recycle still in use equal quality Challenge: Our approach: 19 Encouraging recycling project portfolio Remelt & recycling LIBS pilot Thin-gauge scrap Battery recycling Packaging ambition • Double EBITDA Pilot for faster Screw-extruder Possible future Recycling-friendly aluminium food • Use additional 500 learning of under development source of scrap packaging kt post-consumer industrial alloy for compacting thin and profit scrap per year sorting and difficult scrap 20 Our premium low-carbon products REDUXA CIRCAL Certified, low-carbon aluminium with a maximum Range of prime quality aluminium made with a carbon footprint of 4.0 kg CO2 per kg aluminium minimum of 75% recycled, post-consumer scrap 21 Strong interest in greener aluminium House of Choice, Sweden, Scandinavia’s first zero- energy hotel, Photo: White Arkitekter 22 Summing up Increased sustainability awereness is about to change our industry Sales Directional 2050 Outlook • IAI: around 165 Mtpy Al demand - 65 Mtpy recycled (40%) - 100 Mtpy primary • A net-zero industry • Clean energy sources • New-builds with zero-emission technology • Al-industry will receive few offsets and struggle competing for bio resources Zero-emission technology Recycling (Hydrogen/electric) • Existing and modern HH-smelters with Hall-Heroult + DAC CCS/offsets/bio on-site CCUS or off-site DAC 23 2 4.