Recycling is needed to achieve 20% of the emissions reductions targets for the steel and aluminium sectors. It’s an integral part of the 1.5°C climate-aligned decarbonisation pathways in many metal sectors, explain Sravan Chalasani, Wenjuan Liu and Lachlan Wright at RMI. For aluminium products, the share that comes from post-consumer scrap needs to increase from 21% in 2020 to 46% by 2050. Recycling is already a reality, but reporting and transparency of recycling shares is poor and needs to be greatly improved. Only when customers see the numbers can they demand, pay for and thus incentivise better recycling by the producers. The authors look at the current state of recycling, recirculation and material production efficiency, quoting numbers for Europe, the U.S. and globally. RMI are issuing sector guidelines and are now inviting input for public consultation.

Have you ever stared at the universal symbol for recycling — the “chasing arrows” logo stamped on a soda can — and wondered how much of the can actually gets recycled? Alongside the proliferation of “made from 100% recycled materials” product labels, it can be hard to separate fact from fiction in these claims.

Recycling: 20% of emissions reductions target for Steel and Aluminium

Improved recycling and resource efficiency are an integral part of the 1.5°C climate-aligned decarbonisation pathways in many metal sectors. Material efficiency and recirculation contribute to almost 20 percent of the cumulative greenhouse gas (GHG) emissions reductions necessary between now and 2050 from the steel and aluminium sectors. Consumer-facing companies like Apple, BMW and beverage can manufacturers like Ball are setting ambitious targets related to recycled content in their products.

In the metals sector, particularly for steel and aluminium, the use of recycled material (also called scrap) has been a part of the production process for some time. There has been a gradual build-up of scrap-based electric arc furnaces (EAFs) for steel manufacturing and new recycling facilities for aluminium product manufacturing in North America.

While increased scrap availability and economics might have played a role in getting the facilities built, these companies are starting to capitalise on the positive environmental benefits of products with recycled content. Branded products from steel and aluminium offer a case in point. Despite this increasing scrap usage, there is a lack of transparency around what kind of scrap is used in different products.

This is important because from an environmental perspective, the use of scrap generated from manufacturing processes provides less environmental benefits compared to the use of end-of-life scrap. To explore the nuances around scrap usage, let’s look at the aluminium sector.

The role of scrap in the Aluminium industry

Scrap is generated at multiple steps in the lifecycle of an aluminium product — a soda can, for example. Based on where in a product’s lifecycle the scrap is generated, it can be classified as pre-consumer scrap, post-consumer scrap, or internal scrap:

• Pre-consumer scrap includes the waste aluminium materials that come from manufacturing final aluminium products such as beverage cans from semi-fabricated aluminium products (also called semis) such as rolled can sheet.
• On the other hand, post-consumer scrap (or end-of-life scrap) is the recycled aluminium from various aluminium products that have reached the end of their useful life in the economy.
• The scrap that is formed when molten aluminium is cast into ingots or when aluminium slabs are converted to rolled sheet doesn’t fall into the pre- and post-consumer dichotomy. This waste material, usually referred to as internal scrap is mostly fed back into the remelting processes onsite.

From a climate mitigation perspective, the collection, recycling, and reuse of post-consumer scrap should be encouraged as much as possible. It provides emissions benefits by replacing the emissions-intensive production for primary aluminium (16 tons of CO₂e per ton of primary aluminium as global average).

On the other hand, pre-consumer scrap use does not impact the volume of emissions-intensive primary aluminium used (see Exhibit 1). Instead, generation of pre-consumer scrap is primarily an inefficiency (i.e., it consumes additional energy to be reprocessed) in the system to produce the desired output (e.g., beverage cans). As a result, emissions reductions at the global level will be achieved by reducing the generation of pre-consumer as opposed to increasing its recycling rates (which are already high at around 96 percent).

Aluminium cans in Europe

Despite its environmental benefits, not all post-consumer scrap is looped back into aluminium production. Consider the case of aluminium beverage cans in Europe.

In 2019, among Europe’s beverage cans that have reached their end-of-life, roughly 45 percent were used again in the production of new cans. Around 27 percent were recycled to other uses. Almost 28 percent of the used beverage cans either ended up in a landfill or were incinerated.

Globally, around 26 percent of the total post-consumer scrap generated from all aluminium products (roughly 7 million tons) ends up in a landfill or incineration facility currently. This number is expected to be around 18 million tons by 2050.

For the aluminium industry to stay within 1.5°C aligned greenhouse gas (GHG) trajectory, the share of pre-consumer scrap to the total aluminium production needs to decrease from 13 percent in 2020 to around 9 percent by 2050. This can be achieved through improved production efficiency of aluminium manufacturing processes so that there is less pre-consumer scrap in the first place.

The pre-consumer scrap that is inevitably generated needs to be completely recovered and used back in aluminium production. Simultaneously, the share of post-consumer scrap needs to increase from 21 percent in 2020 to 46 percent in 2050 even as total aluminium production is expected to rise considerably by 2050. In addition to this, there will be about 30 million metric tons of internal aluminium scrap remelted each year until 2050.

Better reporting and transparency needed

To incentivise the use of more post-consumer scrap, it is important to know what percentage of an aluminium product’s inputs are from this end-of-life scrap. Currently, most aluminium producers just report the total recycled content in their aluminium products, making it impossible to know whether or how much post-consumer scrap was used. To overcome this challenge, buyers of aluminium products are increasingly requesting more information on the share of post-consumer scrap in their purchased products.

The International Aluminium Institute has also released guidelines on aluminium scrap transparency that highlight the need for aluminium producers to report on the percentage of post-consumer scrap share in their products. Once reporting of post-consumer scrap share becomes common practice, it will be easy for aluminium buyers to make informed purchasing decisions based on that reported data. It can lead to increased demand for products with high post-consumer scrap content. This will provide the right incentives for aluminium producers to increase the use of post-consumer scrap within the aluminium sector. This can lead to broad sectoral decarbonisation. There are already some signs of this increased demand in the market.

At the end of 2022, Fastmarkets (a commodity price reporting agency) released a new price assessment for aluminium billets with more than 20 percent post-consumer scrap content. This was in response to increasing demand for secondary billets, which is expected to grow in the future. Recent projects exploring effective recovery techniques and use of materials from end-of-life products are another sign of growing interest in post-consumer scrap.

Better disclosures = more recycling

Just like in aluminium, there is a need to differentiate the use of pre- and post-consumer scrap in the steel sector as well. Even though more than 70 percent of the steel generated in the U.S. and 50 percent in the EU is from scrap, at a global level the scrap share of the total steel scrap generated is much lower. Separate disclosure of the different types of scrap inputs into products can eventually lead to improved collection and recycling rates of post-consumer scrap resulting in broad sectoral decarbonisation.

The Horizon Zero Aluminium Emissions Reporting Guidance, now released for public consultation along with the Horizon Zero Steel Emissions Reporting Guidance, contains guidelines on separate reporting of post-consumer content. Along with the IAI aluminium scrap transparency guidelines, these guidance documents represent a growing trend toward separate disclosure of post-consumer scrap content.

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Sravan Chalasani is an Associate, Climate Intelligence at RMI

Wenjuan Liu is a Senior Associate, Climate Intelligence at RMI

Lachlan Wright is a Manager, Climate Intelligence at RMI

This article was first published on RMI.org, and has been reprinted with permission