Market Overview

In the situation where each country including Japan having declared specific targets toward achievement of carbon neutrality for 2050, moves toward decarbonization have invigorated in material industries in recent years.

Most of CO2 emitted throughout aluminum supply chain is occupied by that emitted during virgin metal manufacturing. However, no virgin aluminum is manufactured in Japan, as they are completely imported. Therefore, procurement of green aluminum that is manufactured using renewable energy and other low-carbon methods, and use of recycled aluminum materials are effective in reducing CO2 emissions in the supply chain.

Against this backdrop, aluminum rolling companies, can and beverage manufacturers, construction material manufacturers, etc. sell products that contain large amount of recycled aluminum, while automakers show some attempts for closed loop aluminum recycling to use waste products and raw materials as new resources, and for adopting green aluminum materials into vehicle bodies.

Noteworthy Topics

Closed Loop Recycling in Domestic Aluminum Industry

In Japan, Japan Aluminum Association targets increase in the use of recycled rolled materials. Aluminum alloys used as the raw material of rolled materials that contain cupper (Cu), magnesium (Mg), silicon (Si), manganese (Mn), etc., depending on the type, are used currently as cascading (recycled into lower-quality products than original products) to create cast-metal objects, as no material functions recognized for horizontal recycling that creates the same products as the original by the use of recycled materials.

To achieve decarbonization, increase in the use of recycled materials is needed, but the product quality cannot be guaranteed by using only recycled materials (strength, etc.,) which makes the use of virgin metals inevitable. Therefore, some companies are considering the procurement of green aluminum. Green aluminum uses renewable energy such as solar power or hydraulic power generation in electrolysis processes which require quite an amount of CO2 emissions, and many of overseas aluminum manufacturers (aluminum metallurgy) in recent years prepare for the green aluminum production system. Still, shifting to green aluminum has a challenge of increasing cost (price, etc.)

Future Outlook

Following the declaration of carbon neutrality target by the Japanese government in 2020, many aluminum-related companies from 2021 to 2022 have set targets for the CO2-emissions scope 1 (i.e. direct emission reduction of within a company) as well as scope2 (i.e. indirect emission reduction by the use of electricity, heat, steam supplied by other companies). The specific plans to achieve the targets seem to be in progress after 2023.

Hereafter, strategic material procurement that determines the supply volume of recycled materials such as green aluminum and recycled aluminum materials and that selects suppliers are likely to be needed in the companies involving in aluminum.

Research Outline