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Environmental assessment and site selection
The commitment of international governments to limit global warming to 2 °C has led to an increased awareness and interest in sustainability from various stakeholders. Especially the ecological performances of corporations and their products regarding limiting greenhouse gas emissions (GHG) receives increasing attention.
In Germany, almost 25% of the annual GHG emissions is generated by the industry sector primarily for the respective raw material production. The production of aluminum, which is mainly used for applications in the mobility sector, accounts for 1% of the entire German GHG emissions. However, currently, the assessment focus is set on the vehicle use phase. And, so far little attention is paid on the material production where about 75% of the value adding process of a car takes place in upstream supply chains. Current supplier selection decision making is dominated so far mainly by cost and quality factors. To integrate CO2e as an additional decision criteria, comparable site-specific CO2e emission data from suppliers is essential, but currently not existent.
In order to close this gap, a model has been developed to assess the performance of raw material manufacturers on a site-specific level based on publicly available data only. The developed model is applied to all four primary aluminum manufacturing sites in Germany that produce via the electrolytic reduction of virgin aluminum oxide. The estimated site-specific results of the application range between 13,689 and 14,946 kgCO2e/ton of raw aluminum and demonstrate different levels of internal process know-how, process integration and optimization in the production process of raw aluminum.
In consequence, there is an opportunity to reduce GHG emissions (up to −8.4%) for automotive and other manufacturing companies (e.g. the construction industry) by selecting more environmentally efficient suppliers for raw material and particularly aluminum.
Introduction
The significant growth of greenhouse gases (GHG) in the atmosphere of the earth is considered as one crucial trigger of global warming, which has shown recognizable effects on climate change in the last century (IPCC, 2013). As a consequence, international governments have united and reached a binding agreement to limit global warming to 2 °C and to even foster activities to reach a maximum global warming of 1.5 °C (European Commission, 2015).
One key GHG contributor is the metal industry accounting for approximately 21% of the global greenhouse gas emissions (expressed in carbon dioxide equivalents – CO2e), of which 1% is caused by the aluminum production industry (EPA, 2016; Gautam et al., 2018). The very energy intensive production process is highly depending on electricity (on average 15 kWh per kg produced aluminum in Europe), and accounts for 80% of the GHG emissions in aluminum production (IPCC, 2014). In comparison to steel, aluminum has a 4.58 times higher carbon footprint, taking global average values for basic oxygen steel (2,380 tCO2/t) and primary aluminum1 production (13,930 tCO2/t) into consideration (Egede, 2016). Over the last decade, the European aluminum production for aluminum has grown by roughly 7% to a total production volume of 11,100 thousand metric tons in 2018 (World Bureau of Metal Statistics, 2019a; 2019b). In Germany, the production volume of the aluminum industry has however significantly increased (51.4% growth from 2009 to 2018), and represents an European share of 11.66% (World Bureau of Metal Statistics, 2019a; 2019b). The aluminum production sector alone accounts for 1% of the overall German GHG emissions (BMWi, 2020).
Almost half of the aluminum produced in Germany is used in various applications in the mobility sector (WMV, 2019). This is related to the increased usage of aluminum in the production of passenger vehicles in Europe, which has grown by 80% from approximately 32 kg (in 1978) to 160 kg per vehicle (in 2015) (GDA, 2015). However, in automotive supply chains, currently little consideration is given to GHG emissions created in the manufacturing phase. The focus lies almost exclusively on the usage phase which is already regulated by the European Commission (European Commission, 2009, European Commission, 2019b). The European Political Strategy Centre, which can be considered as the in-house think tank of the European Commission, has already started first discussions on future activities in terms of embedded emissions for the vehicle manufacturing phase (EPSC, 2016). Only recently, first proactive initiatives in the automotive industry, such as the Volkswagen ID project, take the emissions from the entire product lifecycle (including the manufacturing phase) into account and aim at carbon-neutrality per produced vehicle (Volkswagen AG, 2019).
As approximately 75% of the value adding processes in automotive value chains are performed by upstream suppliers (Bai and Sarkis, 2011; Hartley and Choi, 1996) the focus needs to be directed towards the procurement from these companies. Thus, from a purchasing perspective, the selection of more environmentally efficient suppliers for raw material and particularly aluminum is an opportunity to reduce the carbon footprint of automotive and other manufacturing companies (e.g. the construction or aviation industry) and thus for industrial sector as a whole. In pursuit of this goal, a greater transparency of environmental performance of suppliers’ production processes on a site-specific level is required, which is presently lacking. In the aluminum industry, this lack of data transparency and the limited accessibility of primary data on a site-specific level is owed to industrial secret. The life cycle analysis method (LCA) has been frequently used to determine CO2e emissions in the aluminum industry. However, two shortcomings in the application of LCA in the aluminum industry exist: the missing standardization in setting system boundaries, and thus lacking comparability, and the consultation of average industry data in order to replace unavailable primary data which also hampers comparability. Particularly, comparability of production sites is currently not possible. Hence, this study develops an approach to close this gap and to consequently create the data basis and methodological background for a comparable LCA analyses and assessments between specific aluminum production sites and a consequent, practical integration of CO2e as additional criteria in procurement decision-making.
In the following, a review of related literature is presented (section 2) and the research approach is sketched (section 3). The results of an exemplary case study application on four German primary aluminum sites2 are illustrated in section 4. Finally, a discussion and conclusion is given in section 5.
