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Sustainable Aluminium moves closer to the market

The ASI (Aluminium Stewardship Initiative) has just published its most practical  Chain of Custody Standard yet.

Aluminium has an excellent future in the Circular Economy, as it is infinitely recyclable. It is establishing itself as a carbon-saving material for transportation vehicles. The combined properties of strength and lightweight make it ideal for more fuel-efficient cars and planes. It is also a visually attractive and corrosion resistant material for the building industry.  The projected demand for aluminium is such that production of primary aluminium and increased recycling rates will both be needed into the future. However, the production of primary aluminium is very energy intensive, emits greenhouse gases and bauxite mining can negatively impact indigenous people.

The ASI was set up as a multi-stakeholder initiative to improve the sustainability of the aluminium sector and a Performance Standard was agreed in 2014 covering bauxite mining, alumina processing, aluminium smelting and onward processing. So companies in the supply chain can find out what they have to do to comply with the Performance Standard and become more sustainable. But accounting for and transferring sustainable aluminium down the supply chain to the final consumer is just as important. The “Chain of Custody” (CoC) Standard to cover this process has not been easy to develop. This CoC Standard will be used by far more companies than the Performance Standard and it has to be practical to implement for all actors in the long aluminium supply chain.

Early drafts of the CoC Standard published in 2014 were complicated and imposed impractical segregation requirements on companies wishing to process both sustainable and conventional aluminium in the same facility. The ASI has now taken on board the experience from other commodities sectors with sustainability schemes covering similarly long supply chains involving multiple processing steps. The third draft of the CoC Standard published recently has been radically changed and will be much more effective in promoting industry uptake.

The key parts of the new Standard are explained below.

There are no limits to the mixing of sustainable (ASI compliant) and conventional aluminium as long as a mass balance accounting system is used and there is a due diligence process on the source of the conventional aluminium. A mass balance system accounts for sustainable material as it enters and leaves a facility but allows mixing of all types of material in between.  At the end of a specified accounting period outputs of sustainable material must equal or be less than inputs. The due diligence process for conventional aluminium will act to improve industry standards more widely.

Recycled aluminium from post-consumer scrap is ASI compliant after successful due diligence on its origin with cash purchases constrained by local law and in any case below $10,000.

Pre-consumer scrap must come from an ASI certified operator to be compliant. So any pre-consumer scrap from a non-certified operator has the same status as conventional primary aluminium.

 Companies can sell sustainable aluminium ahead of purchasing it, providing they are in balance at the end of a twelve-month period.  This means that producers can go ‘short’ on sustainable material until the end of the accounting period when they must be in balance. There is also provision for those that can’t purchase the required sustainable aluminium at the end of the accounting period due to  ‘force majeure’ declared by a supplier.

The mass-balance can encompass all certified sites owned by one company so material does not have to be shipped between sites just to bring them all into balance. Unsold sustainable material can be carried over into the next year before losing its status as sustainable the following year.

Subcontractors can be included in a company’s certification scope, allowing existing commercial arrangements to be maintained.  

Certified Casthouses can sell credits, instead of sustainable aluminium directly to end-users where there is no continuous chain of certified operators.  These credits are transferred separately from the physical aluminium. They are a widely accepted alternative to the mass balance system. Purchasers of the credits will be restricted in the claims they can make and will not be able to trade the credits.

An ASI CoC certificate is granted after a successful third party audit and lasts three years, with an intermediate surveillance audit.

Next Steps

There are still two further consultation periods before publication of the final CoC Standard, which is expected later in 2017, but the path to an implementable solution seems clearer now.  Sustainable aluminium has moved a step closer to the market.

To comment on the ASI CoC Standard go to

 http://aluminium-stewardship.org/asi-standards/chain-of-custody-standard/

 

 

 

 

Published: 27 October 16

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