The Subject of this analysis New Zealand Aluminium Smelters limited (NZAS)
It is located in Bluff and it contributes with half a billion dollars to the Southland economy representing 13.5% of its GDP
Worldwide the aluminium industry is facing challenging times. Aluminium is a commodity and its price is set by the London Metal Exchange.
NZAS produces around 350000 tonnes per year. The declining price and increasing cost of energy is hindering the ability of NZAS to make a profit. From a broad perspective this is the reason why the company has made a loss in the last two financial years.

From an environmental perspective NZAS has accepted climate change as a growing concern.
Electricity represents 40% of NZAS cost and close to 15% of New Zealand power consumption. Buying electricity from a low or carbon neutral source is critical to reduce the company’s carbon consumption. Today NZAS is in negotiations with Meridian Energy over a 27-year contract in order to cut costs and save jobs. If successful, as a by product of this negotiations NZAR will reduce it carbon footprint since Meridian generates electricity from renewable sources.
The biggest challenge is a reduction in carbon consumption of producing Aluminium. In 2011 NZAS produced 357000 tonnes of metal which released 669000 tonnes of CO2e into the atmosphere at a rate of 1.87 tonnes of CO2e per ton of metal produced (the company’s best ever performance); an encouraging statement. However, another issue must be taken into account like the fact that NZAS is already close to World’s Best Practice. According to a statement released by NZAS in 2007 aluminium producing technology constraints affect achieving further emissions savings.
Aluminium is produced through in a “Reduction chamber” an electrolytic process. The first part of the process – Hall-Heroult Process – consists in dissolving alumina in a bath of sodium aluminium fluoride at around 1000 Celsius (heated by burning fossil fuels). The second part consists in passing electricity –at low voltage but at high current – through a carbon anode. It is in this part of the process where the highest amounts of CO2e are released into the atmosphere. These two processes occur simultaneously.

Approximately 85% of NZAS GHG emission – within scope 1 – comes from “anode consumption and baking”. Unfortunately this is the only technology available today to produce aluminium. Because of this most of the initiatives to reduce NZAS GHG emission revolve around procedures to extend the life of the carbon anode.

* Airburn Prevention, Airburn is the undesired process in which an anode is consumed prematurely without yielding aluminium. It happens when the anode is removed from the reduction chamber while still hot to collect the molten aluminium. The oxygen in the air accelerates the consumption of the anode releasing large quantities of CO2 and shortening its lifespan. It is in this critical part of the process where CO2 emission could be reduced. NZAS is a specialist in producing aluminium, it is a matter of allocating resources – mainly man hours – into the development of more an efficient where the time the anode is outside the chamber is reduced. * Perfluorocarbons (PFCs). PFCs represent 5% of the total amount of GHG emission at NZAS. It is a by-product of aluminium production and it is a GHG. PFCs are released into the atmosphere when the Reduction Chamber is opened to remove the anodes and collect the molten aluminium. Most of the GHG emission reductions at NZAS have been made in this area. However, PFCs have high global warming potential – up to 9200 times that of CO2. From a volume perspective, 5% is insignificant compared to the 85% released by anode consumption. However, from global warming potential perspective it must be addressed too. Nonthermal Plasma can decompose up to 86% PFCs at atmospheric pressure. Once again is up to specialists in the area to implement this kind of technology to counter GHG emissions. * Company Culture, Investment in new and/or more efficient technology to produce is critical to reduce NZAS carbon footprint. Technology combined with Worlds Best Practices can help further reduce carbon emissions into the atmosphere. However, the implementation of more efficient processes will depend on the level of engagement NZAS personnel. Reducing carbon emission must become part of the company culture. Cultural change is hard to manage, even harder in a company like NZAS with an employee base of 800. An internal campaign aimed at aligning staff culture to a greener company culture may motivate employees to embrace this change and take ownership over reducing carbon emissions. * Aluminium Recycling, If part NZASs production could be replaced by recycling aluminium, costs could be driven down and as a consequence emission too. Recycling uses 95% less energy than producing aluminium in a traditional way. NZAS already counts with casting facilities, so there would not be a need to invest in this area. It would be a matter of collecting aluminium and processing it at the plant. * Drained Cathode Cell (DCC). DCC is an emerging process to produce aluminium; it was first promoted as an alternative to the Hall-Heroult Process in 1950. Today it is still at its early stages. However, its inventors Vittorio de Nora and Jainagesh A. Sekhar claim that it can reduce electricity consumption up to 11%. Subsidising further research and development of this process may prove a good investment in the future. * Electricity usage (Scope 2), as detailed earlier NZAS is currently in negotiations for a 27-year contract with Meridian. The main reason is to reduce the electricity bill. Should this initiative fail Trust Power could be a green alternative. A sustainable source of electricity coupled with in house production of electricity could add to cutting costs and reduce carbon emission even further. Due to the location of the plant solar panels may not be a viable alternative, however wind farms may. NZAS is located at sea level and the section it operates from has some space to build wind mills.

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