Emirates Global Aluminium, the UAE’s largest industrial conglomerate outside the country’s oil and gas sector, plans to build an aluminium recycling plant with a capacity of 150,000 tonnes per year ― as it looks to decarbonise its operations.
The plant will be its first aluminium recycling centre and the biggest in the UAE, the company said on Wednesday. EGA did not provide details of the projected cost of the factory.
EGA, owned equally by Mubadala Investment Company of Abu Dhabi and Investment Corporation of Dubai, will market the recycled aluminium under the product name EternAL, the company said. Last year, it marketed aluminium made using solar power under the product name CelestiAL .
“End-users of aluminium — from auto manufacturers to beverage makers — are increasingly committing to net zero in response to the expectations of society,” said Abdulnasser bin Kalban, chief executive of EGA.
“Our first recycling facility to produce EternAL is one of the steps we plan to take, to provide low-carbon metal for our customers around the world.”
The UAE is aiming to become carbon neutral by 2050 with new investments worth Dh600 billion ($163.5bn) planned in clean and renewable energy sources over the next three decades.
EGA, one of the world's largest aluminium producers, has smelters in Abu Dhabi and Dubai. The company is developing its own technology to decarbonise operations and reduce emissions. Its aluminium is shipped to more than 50 countries. EGA generates about Dh20bn in economic activity yearly and supports more than 60,000 jobs in the UAE.
The aluminium sector accounts for 1.4 per cent of the UAE economy.
Companies that use aluminium across the world registered an improvement in operating conditions in December as new orders and output increased slightly.
The seasonally adjusted Global Aluminium Users Purchasing Managers Index, a composite indicator of operating conditions at manufacturers that are heavy users of aluminium, reached 51.3 in December, from 51.4 in November, figures compiled by IHS Markit show.
Aluminium prices are forecast to increase 6 per cent in 2022 on strong demand and supply concerns after a projected jump of 50 per cent last year, but will ease going forward as energy constraints dissipate, the World Bank said in its latest Commodity Markets Outlook report.
The recycling plant will process post-consumer aluminium scrap, such as used window frames, as well as pre-consumer aluminium scrap from extrusion production, into low-carbon, high quality aluminium billets, said EGA, which produces about 2.7 million tonnes of aluminium every year.
Aluminium scrap for the recycling centre will mainly be sourced from within the UAE and across the region. More than half of the aluminium scrap generated in the GCC is currently either disposed of or exported, the company said.
Feasibility studies for the project are under way. Production expansion could begin as early as 2024.
Production of aluminium through recycling requires a fraction of the energy consumed to produce new primary aluminium, with significantly lower greenhouse gas emissions per tonne of production, EGA said.
Recycled aluminium will account for up to 60 per cent of global aluminium supply by 2050, according to forecasts by the International Aluminium Institute (IAI).
“This facility will also strengthen EGA’s position as a global leader in billet production, growing our capacity from some 1.15m tonnes per year to some 1.3m tonnes amid increasing demand from customers,” Mr bin Kalban said.
The recycling plant will also enable EGA to further contribute to Operation 300bn and the In-Country Value programme by replacing some imported raw materials with recyclable resources already in the UAE, the chief executive added.
The company joined the Ministry of Industry and Advanced Technology’s National ICV programme in November last year.
The main objective of ICV certification is to boost the private sector’s participation in the economy, enable the diversification of gross domestic product and localise critical parts of the supply chain.
Meanwhile, Operation300bn aims to double industry’s contribution to national GDP to Dh300bn by 2031.
Aluminium is light, strong, durable, electrically and thermally conductive, formable and infinitely recyclable, which makes it ideal for applications from electric vehicles to wind farms and mass transit systems that are essential to reach net zero, EGA said.
Global aluminium demand will rise by 50 per cent to 80 per cent by 2050 driven by global commitments to reduce emissions, according to forecasts by the IAI.