Industrials
| Sector | Industrials |
| Sub-sector | Metals and mining |
| Location | Global |
With aluminium production increasing over the past decade to meet demand driven by population and economic growth, direct emissions from the sector have gradually risen to make up approximately 3 per cent of the world's direct industrial CO2 emissions.1 As a central material for many energy transition technologies, such as lightweight electric vehicles and solar photovoltaic panels, global aluminium demand is expected to increase a further 40 per cent by 2030.2
To deliver this growth sustainably, aluminium production needs to change. By integrating renewable energy into operations, the carbon footprint of aluminium production can be reduced to around one-fourth of the global average.3
The Norwegian aluminium company aims to reduce its carbon emissions 30 per cent by 2030 and has been building out its global renewable energy business, Hydro Rein, to help meet this target.4
Combining MAM’s renewable energy development and financing expertise with Hydro Rein’s industrial experience, the businesses have been working together since 2017 to deliver 1.3 GW of renewable energy capacity across the Nordics and Brazil.
Outcome
With the support of MAM, Hydro Rein has developed long-term power purchase agreements (PPAs) totalling 5.3 TWh annually.5 This includes offtake agreements with several aluminium plants, mines and refineries.
Around two-thirds of Hydro’s aluminium is now made using renewable energy sources and their lower carbon aluminium generates a maximum 4.0 kilograms of CO2e per kilogram – a quarter of the global average.6
Moving forward, MAM’s investment will help deliver a portfolio of wind and solar projects representing a further 8.4 GW of gross capacity and support the continued expansion of renewable energy solutions to accelerate the decarbonisation of aluminium production and heavy industry.
partnership between MAM and Hydro
gross capacity of renewable energy in development
of annual long-term PPAs delivered5
Decarbonising vital industrial materials like aluminium is a key challenge of the energy transition. By combining our capabilities with Hydro, we’re able to unlock a greener future for industry and the communities and markets served by industry.”
Mark Dooley
Head of Green Investments
Macquarie Asset Management
1. IEA, Aluminium, July 2023.
2. We Forum, ‘Aluminium demand will rise 40% by 2030. Here’s how to make it sustainable’, 28 November 2023.
3. Hydro, ‘Hydro REDUXA low-carbon aluminium’.
4. Hydro, ‘Norsk Hydro: Hydro to produce first near-zero carbon aluminium in 2022’, 13 December 2021.
5. Hydro, ‘Hydro Rein and Macquarie Asset Management become partners to develop more renewable energy for industries’, 24 October 2023.
6. Hydro, ‘Hydro Low-Carbon Aluminium’.
At Macquarie Asset Management, we view sustainability as part of our fiduciary duty to protect and grow our clients’ assets. This focus also helps us generate positive outcomes for our investee companies and the communities they serve. Our latest Sustainability Report outlines the progress we have made over the past financial year.
