Aluminium: The geopolitical case to decarbonise and diversify

Rare earth minerals tend to hog the limelight in discussions of the commodities that will underpin the energy transition, particularly in the context of geopolitical competition for resources. But more everyday materials are central to current global economic and industrial trends, and are also vulnerable to a more unstable and uncertain international environment.

Aluminium is a critical component in low carbon technologies such as electric vehicle battery casings and wind turbines; its significance acknowledged by inclusion on the United States Federal Government’s critical mineral list. Demand is set to surge further through the coming decade and beyond. The transport, construction, packaging and electrical sectors will account for three-quarters of a 40% rise in global demand by 2030, according to the International Aluminium Institute (IAI)

Yet the sector faces challenges. While it is a key contributor to the energy transition, aluminium has high GHG emissions throughout its supply chain, from bauxite mining to later refining and smelting. As the Mission Possible Partnership has clearly outlined, multiple approaches are needed for the industry to reach net zero emissions while also keeping pace with demand. It’s a view echoed elsewhere. “Aluminium is critical for the energy transition. Not only do we need more of it, it has to be cost-competitive and low-carbon,” according to the head of the World Bank’s Energy and Extractives practice.

In parallel with the need for decarbonisation, geopolitical risk is another challenge for the sector and for its end users. It has the potential to impact the sector in two key ways: first, ruptures in trade flows and supply chains as a consequence of geopolitical shocks or flashpoints, and second, greater competition in general for commodities and technologies. In the case of the former, the invasion of Ukraine by Russia – the world’s third largest primary aluminium producer – pushed aluminium prices to an all-time high in the first full month of the conflict. Now US tariffs of 200% on Russian aluminium and an EU ban on some aluminium products from the country generate new uncertainty and risks for many end buyers. 

Meanwhile, in the latter case, geopolitical competition for resources has even greater potential to impact prices and supply chain resilience, particularly during a period of growing demand and strategic realignment to a new, greener economy. Over half of global aluminium smelting capacity is concentrated in China. This lack of diversification would pose underlying risks to international supply chains even without US-China tensions and the fact that China’s domestic demand is also likely to surge, caused by EV and renewables infrastructure production.

Many of the initiatives needed to drive change at scale to address decarbonisation and the sector’s emerging geopolitical risks are costly and complex. To meet these challenges, secondary aluminium will have a critical role in the coming years. But while recycling rates are fairly high – between 42% and 70%, and up to 90% in some countries – too often grades of aluminium are treated the same, with highly engineered aviation aluminium facing the same fate as a drink can or crushed into construction materials alongside automotive scrap. 

Through combining deep tech with material sciences, Nandina REM has unlocked new resource categories that are available today, and do not require the same level of investment as many other low carbon aluminium sourcing solutions. Preventing the scrapping and destruction of aviation aluminium retains the value of one of the world’s most highly engineered materials while also reducing emissions, creating more diverse supplies that will build resilience for end users in the years ahead. 

To find out more about how Nandina REM can help you decarbonise and diversify your supply chains, contact us at or through LinkedIn.

Source references: International Aluminium Institute, Mission Possible Partnership, The World Bank 

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