Aluminium producer embeds sustainability from energy use to product line

Interest in topics such as conservation techniques, the impact of climate change, and sustainable, ​​environmentally friendly practices have reached record highs worldwide. That’s according to Google Trends data on the top searches for 2021.

Even as consumers get behind the energy transition and prioritise sustainability, global industries are looking to optimise their operations accordingly.

Initiatives such as the Living Business programme support small and medium enterprises (SMEs) through one-on-one strategic guidance on transitioning to more sustainable ways of doing business. The programme, established three years ago, is now available across 16 countries, including in the Middle East and North Africa.

Leading aluminium extruder Balexco was one of the programme’s early adopters in the region. The Bahrain-based company took part in the Living Business programme in 2021.

It has since taken concrete action to improve sustainability on several fronts.

Balexco’s first step was to study the feasibility of migrating to renewable energy installations at its plants, in early 2020. However, pandemic-linked disruptions meant that the company is only just readying to transition to a combination of wind and solar energy.

“We are in final evaluation stages and would like to finalise the project and sign agreements in the next two months,” says Rayomand Palkhiwala, Chief Financial Officer at Balexco.

The case for aluminium recycling

But renewable energy is just one part of the story.

Producing aluminium from virgin sources is an energy-intensive process. Recycling the metal instead requires only about 5 per cent of the energy it takes to make new aluminium out of bauxite, Palkhiwala explains, citing a Stanford University study.

“If we are able to reduce aluminium scrap generation and re-melt scrap generated in the process, we can help achieve [Bahrain’s] national renewable energy target of 5 per cent by 2025 and 10 per cent by 2035,” he says.

The difference in energy use is so stark that traders jokingly refer to aluminium as ‘congealed electricity’.

Similarly, producing one tonne of aluminium from scratch results in about 17 tonnes of carbon emissions, as compared with the 0.6 tonnes emitted from secondary aluminium, according to energy research consultancy Wood Mackenzie.

But although the Middle East produces 10 per cent of the world's aluminium, the region has yet to mature in terms of recycling the metal. Overall, only about one-tenth of all metals in the GCC are recycled, according to data from consulting firm Strategy&. Recycling rates for metal surpass 90 per cent in countries such as Germany and Japan.

Action is needed now. Besides energy consumption and the release of greenhouse gas emissions, recent studies have emphasised the impacts resulting from the water consumption of the mining industry. The effect of climate change is expected to lead to increasing water stress over the next two decades for mining operators as well as metals companies in water-scarce areas.

Balexco turned to Living Business for strategic counsel. Following consultations with experts, the company was able to enhance its business processes, reactivate an in-house remelt plant and cut down on overall energy consumption, thus reducing the primary aluminium purchased from the smelter.

Balexco believes it can lead by example within the region, with initiatives such as reducing and recycling scrap, as well as using solar energy. And if an anticipated carbon tax is implemented within the GCC, it will drive local aluminium smelters to improve recycling rates and produce green billets, Palkhiwala says.

“Programs like Living Business create awareness and inspire, both industries and individuals, to be mindful of how they’re impacting the environment on a daily basis,” Palkhiwala says.

Green products launched

Now the company is going a step further by rolling out new products that can help consumers make a difference in their day-to-day lives. Balexco’s new thermal break window system helps reduce electricity consumption for cooling a room by around 20 per cent as compared to regular window systems. While the initial product cost may be high, the advanced technology reduces consumers’ reliance on air conditioning or heating, helping to lower electricity bills and carbon emissions.

“It all comes back to you. Recycling comes down to one person taking action,” Palkhiwala says. At home, he and his family have walked the talk, one step at a time. They have been doing simple things such as composting organic waste, as well as segregating waste like metal cans, paper and cardboard, and plastics, for better recycling uptake.

“The amount of lost energy from throwing away recyclable commodities such as aluminium cans and newspapers is equivalent to the annual output of 15 power plants,” he says. “As stewards of the environment, we are responsible for preserving and protecting our resources for ourselves and for future generations.”