Aluminum Industry States Position on Climate Change U.S. Legislative Policy.

Emissions Legislation Could Mandate Reductions for U.S. Companies

WASHINGTON -- The Aluminum Industry today has made public its "Position on Climate Change Policies." This action follows Aluminum Association member meetings in Washington and a ballot vote of its board.

"We believe that it is important for the U.S. aluminum industry to assume a leadership position in this cause for environmental sustainability of our industry and products, on a market-wide and global basis," said Patrick Franc, chairman of The Aluminum Association and president of ARCO Aluminum/BP.

The position statement recognizes that scientists have determined that the earth is gradually warming due, in part, to increased atmospheric concentrations of greenhouse gases due to human activities, and that the aluminum industry recognizes that climate change presents a challenge that requires cooperative action on a global basis, and promotes international participation.

Should the U.S. adopt legislation that would regulate greenhouse gas emissions (GHG), the industry seeks recognition of the benefits of recycling toward GHG emissions reduction. After the initial energy investment in primary aluminum production, the recycling of aluminum saves 95% of energy and greenhouse gas emissions.

"The aluminum industry in the U.S. has made considerable reductions in greenhouse gas emissions, offering both experience and a positive track record in this cause. Our contributions through recycling and downstream emissions reductions through better, less emitting automobiles, will help the United States and other countries protect the environment," said Steve Larkin, president of The Aluminum Association.

The industry's fully-developed complementary primary and reclamation system thereby currently reduces the overall energy consumption in total U.S. aluminum production by approximately 46 percent, and reduces GHG by approximately 38 percent. The industry sees opportunity for further reduction and supports policy that provides incentives for recycling.

The position demonstrates that life-cycle studies of aluminum's use in North American automotive applications show that replacing two pounds of traditional material with one pound of aluminum to lightweight a vehicle can save on a typical mid-size sedan 20 pounds of CO2 emissions over the lifetime of that vehicle. The use of automotive aluminum has doubled since 1991 and is expected to double again in the next decade. This light-weighting savings occurs also for truck, buses, trains, boats and ships for all transportation means. Any climate change policy should recognize and provide incentives for additional transportation light-weighting applications that reduce transportation-related GHG emissions.

The aluminum industry's Voluntary Aluminum Industrial Partnership has met or exceeded goals since 1990. From 1990 to 2000 the program reduced by about 45% PFC emissions, resulting in annual emissions reductions of over 2.2 MMTCE. Since the industry has taken the initiative to voluntarily reduce its process greenhouse gas emissions, it strongly supports policies and programs that give credit for early action taken since 1990.

The Industry supports efficient and economically sound emissions trading programs and registries that recognize early emissions reductions. It supports an economy-wide, fair market-driven approach that may include a cap and trade program that limits GHG emissions. The approach should result in market incentives that stimulate investment and innovation in technologies necessary to grow while achieving environmental reduction targets.

To reduce potential negative impacts on the U.S. manufacturing sector, which by 2005 had already reduced total GHG emissions below 1990 levels, provision should be made in any GHG program to reduce the expected negative impacts of energy cost increases such as through corporate tax credits. The industry participates in and recommends public/private partnerships to spur pre-competitive research to reduce greenhouse gas process emissions and to promote energy saving aluminum product applications.

The industry supports a responsible approach to growth in demand for its products and the consequent growth in activity and related emissions, noting that solutions to the climate change issue involve both reducing emissions at the source, and also over the full lifecycle of the material or products.

Policy Position on Climate Change of The Aluminum Association

Industry Overview

The Aluminum industry operates about 200 plants in 30 U.S. states, employs about 100,000 people with approximately $3.5 billion total payroll. While Association member companies conduct business worldwide, the U.S aluminum industry ranks fourth in the world in annual primary aluminum production, accounting for about 16 percent of world supply or over 8 billion pounds of metal. The Association represents U.S. primary producers of aluminum, recyclers, producers of semi-fabricated products, and suppliers.

Americans consume aluminum primarily in transportation (32 percent), containers and packaging (21 percent), and building and construction (13 percent). The advances in the automotive aluminum market are helping Americans drive better-performing cars that in turn reduce CO2 emissions and save fuel consumption.

Recycled aluminum--from beverage cans to all other uses--requires only about 5 percent of energy as compared to ore-to-primary production. Americans' recycling efforts and the industry's aluminum reclamation system thereby reduce the overall energy consumption in total U.S. aluminum production by 46 percent.

Industry Background on Voluntary GHG Emissions Reduction

The aluminum industry's Voluntary Aluminum Industrial Partnership has reduced two potent PFCs, tetrafluoromethane (CF4) and hexafluoroethane (C2F6). Twelve companies in this aluminum industry program were recognized by President George W. Bush's 2002 Climate Change Report and the EPA 2002 Climate Protection Award for meeting their 2000 goal. This action reduced PFC emissions from U.S. primary aluminum smelting by 45%--equivalent to 2.2 million metric tons of carbon dioxide annually.

In 2003 the primary aluminum sector joined the U.S. Climate Vision program to further reduce PFC emissions. This goal of 53% reduction on direct CO2 emissions (a combined direct carbon emission from 1990 to 2010 based on PFC reductions and reduced anode carbon consumption) equates to an additional reduction of 25 percent since 2000. This goal was surpassed in 2005 with a 56% reduction from 1990.

2007 Aluminum Industry Position on Climate Change Policies

1. Scientists have determined that the earth is gradually warming due, in part, to increased atmospheric concentrations of greenhouse gases due to human activities.

2. The aluminum industry recognizes that climate change presents a challenge that requires cooperative action on a global basis, and promotes international participation.

3. Climate policies should recognize the benefits of recycling toward GHG emissions reduction. After the initial energy investment in primary aluminum production, the recycling of aluminum saves 95% of energy and greenhouse gas emissions. The industry's complementary primary and reclamation system thereby reduces the overall energy consumption in total U.S. aluminum production by approximately 46 percent, and reduces GHG by approximately 38 percent. The industry sees opportunity for further reduction and supports policy that provides incentives for recycling.

4. Life-cycle studies of aluminum's use in North American automotive applications show that replacing two pounds of traditional material with one pound of aluminum to lightweight a vehicle can save on a typical mid-size sedan 20 pounds of CO2 emissions over the lifetime of that vehicle. The use of automotive aluminum has doubled since 1991 and is expected to double again in the next decade. This light-weighting savings occurs also for truck, buses, trains, boats and ships for all transportation means. Any climate change policy should recognize and provide incentives for additional transportation light-weighting applications that reduce transportation-related GHG emissions.

5. The aluminum industry's Voluntary Aluminum Industrial Partnership has met or exceeded goals since 1990. From 1990 to 2000 the program reduced by about 45% PFC (CF4 and C2F6) emissions, resulting in annual emissions reductions of over 2.2 MMTCE. Since the industry has taken the initiative to voluntarily reduce its process greenhouse gas emissions, it strongly supports policies and programs that give credit for early action taken since 1990.

6. The Industry supports efficient and economically sound emissions trading programs and registries that recognize early emissions reductions. It supports an economy-wide, fair market-driven approach that may include a cap and trade program that limits GHG emissions. The approach should result in market incentives that stimulate investment and innovation in technologies necessary to grow while achieving environmental reduction targets.

7. To reduce potential negative impacts on the U.S. manufacturing sector, which by 2005 had already reduced total GHG emissions below 1990 levels, provision should be made in any GHG program to reduce the expected negative impacts of energy cost increases such as through corporate tax credits.

8. The industry participates in and recommends public/private partnerships to spur pre-competitive research to reduce greenhouse gas process emissions and to promote energy saving aluminum product applications.

9. The industry supports a responsible approach to growth in demand for its products and the consequent growth in activity and related emissions, noting that solutions to the climate change issue involve both reducing emissions at the source, and also over the full lifecycle of the material or products.

March 2007