Hindalco Aims for a 30% Increase in Low-Carbon Output in India by 2026
Indian aluminum manufacturer, led by billionaire Kumar Mangalam Birla, aims to elevate its low-carbon manufacturing to a minimum of 30% of its overall production within the next three to four years.
This strategic move is driven by the growing global demand from various industries that seek to enhance the sustainability of their supply chains. The company aims to align with the evolving needs of the market.
The availability of solar power based on its smelters, Hindalco Industries Ltd. It will certify approximately 8% of its annual aluminum production of 1.3 million tonnes as low-carbon in the current fiscal year, which began April 1.
The Managing Director Satish Pai said in a conference call following the Mumbai-based company’s quarterly profits, “What we are trying to do in Hindalco and Novelis is that we prepare to meet different customers having different requirements,” Pai said, referring to the US unit Novelis Inc. “It is a mix of things we are trying to be ready for and we have to see how the market evolves,”. He is also the chair of the International Aluminium Institute.
Hindalco struck a 25-year arrangement with one of India’s leading renewable energy businesses Greenko Energy Holdings to provide carbon-free electricity to the aluminium producer’s Odisha smelter last year.
In addition, the sector is shifting towards cleaner energy to meet the criteria of the Carbon Border Adjustment Mechanism, or CBAM, which puts levies on certain imports from countries that do not price carbon in the same manner that Europe does.
According to Pai, Hindalco has shipped approximately 200 tonnes of low-carbon aluminum to Western economies. Demand for low-carbon aluminum is primarily in Europe, but “it is a matter of time as it spreads to other countries,” he added that there is currently no demand for the product in India. The company is not getting any “real premium” for this product.
Pai said. “I don’t think you will get a large premium for it but there will be certain markets, sectors, and customers who will only buy low-carbon. So you have to have it if you want to service those customers.”
The metal is incredibly energy-intensive, and its carbon footprint varies greatly depending on the energy source that feeds smelters.