UK Metals Expo: ALFED Panel Slides

Unlocking the Economic Viability of Recycled Aluminium 0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Aluminium as a Strategic Metal • Vital part of a wider economic toolkit • Offers a clear, long-term vision • Ensures national accountability • Prevents inequality, allows the UK to compete on a global stage • Enables growth in the green economy

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

The Value Proposition • By adopting recycled aluminium, manufacturers can realise cost savings, reduce environmental impact, and position themselves as leaders in sustainable and responsible business practices.

• Addressing threats to the UK aluminium market is essential to unlocking the full potential of recycled aluminium and driving its adoption across various industries.

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Today’s Panel

Tom Giddings Executive Director Aluminium Packaging Recycling Organisation Ltd (Alupro)

Gerald Keen Director BACALL

Rachel Wiffen Senior Engineer, Quality Systems Manager Innoval Technology

Christopher Pilgrim Knowledge Transfer Manager - Materials Innovate UK KTN

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Unlocking The Economic Viability Of Recycled Aluminium In Manufacturing:

The Packaging Perspective

Content

• Context – Market and Recycling Rates • Government Policy and Promoting Recycling – Intrinsically Linked?

• So what? – Takeaway thoughts

SO, WHAT’S THE BIG PICTURE?

Context – Market & Recycling Rates UK Market – The Biggest In Europe!

Recycling Rates Keep Pace!

UK Aluminium Packaging Market 2012 to 2021

Aluminium Packaging Recycling 2012 to 2021 100%

180

90%

160 82%

230 76%

Recycling Rate (%)

80%

210

190

70%

66%

69% 65%

72%

71%

71%

140 68%

65%

68%

56%

60% 50%

82%

46%

47%

48%

50%

51%

50%

100

52% 80

40%

170

60

30%

40 2012

150

120

2013

2014

2015

2016

2017

2018

2019

2020

2021

Year 2012

2013

2014

2015

2016

2017

Year

2018

2019

2020

2021 All Aluminium Packaging - Recycling Rate (%)

Beverage Cans - Recycling Rate (%)

Aluminium Packaging Recycled (Tonnes)

Aluminium Packaging Market (Kt)

250

GOVERNMENT POLICY & PROMOTING RECYCLING – INTRINSICALLY LINKED?

Recycling Aluminium Packaging Is Already Viable!

68% Recycling Rate for All Aluminium Packaging in 2021

82% Recycling Rate for Aluminium Beverage Cans in 2021

So, how can this be improved?

Government Policy?

It can be good… …or very bad!

Policy & Recycling – A Question of Good Design!

The Opportunities…

The Risks…

•

•

A well-designed Deposit Return Scheme for Drinks Containers could:– – – –

Bring recycling rates to 90%... …At a low cost for brands who use this sustainable and valuable material… …provide high quality recyclate for the circular economy… …And revolutionise attitudes to recycling!

–

OR

– –

Drive collection and recycling rates of all aluminium packaging typed up… …Incentivise the use of recyclable packaging… …And spark innovation in recycling technology and systems!

–

–

•

• A well-designed Extended Producer Responsibility (EPR) system could:–

A poorly-designed Deposit Return Scheme for Drinks Containers could:-

A poorly-designed Extended Producer Responsibility (EPR) system could:–

OR

Damage the market for cans (by up to 25%!), particularly multipacks… …needlessly charge those wanting to use cans for setting up YET ANOTHER ineffective collection system… …annoy the public and ‘switch them off!’

– –

Fail to take account of circular economy potential of aluminium compared to other materials… …be so onerous that it suppresses innovation… …AND lack the ‘teeth’ to actually deliver recycling rate improvements, being an expensive ‘white elephant.’

So, how does our industry help with getting the right policy?

Vision A world where consumers know that they can recycle their empty aerosols in their kerbside recycling, and be confident that their packaging waste will be collected, sorted and recycled responsibly.

Key Messages • More aluminium packaging than ever is being recycled, but there’s room for improvement…

• …policy can help, but also hinder, • …collective action by industry CAN HELP GET GOOD POLICY… • …and realise the circular economy for aluminium packaging!

16

Unless otherwise stated, all rights are reserved. No part of this document may be photocopied, reproduced, translated to another language, or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express permission of Innoval Technology Ltd.

The information contained in this document is subject to change. Notice of changes will be made only to the parties deemed relevant by Innoval Technology Ltd. Innoval Technology Ltd assumes no responsibility or liability for any errors that may appear in this document or for any incidental or consequential damages.

© Innoval Technology Ltd 2023 | ICJ23-016

Global client base.

Diverse range of markets Long-term collaborations 90%+ repeat business.

Committed to R&D collaboration.

See https://www.innovaltec.com/case-studies/

© Innoval Technology Ltd 2023 | ICJ23-016

3000

Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23

£ / tonne

18

Comparison of aluminium price, LME vs UBC baled scrap vs old rolled scrap

2500

2000

1500

1000

500

0 Data source: letsrecycle.com

Old Rolled UBC scrap (baled) LME monthly average © Innoval Technology Ltd 2023 | ICJ23-016

19

Scrap, Scrap sorting,

Casting, Extrusion, Forming, Joining, Testing,

Design, Specifications,

& Scrap blending

Design & CAE/FEA, LCA

Manufacturing, Testing

© Innoval Technology Ltd 2023 | ICJ23-016

20

“Economic Viability is informed by financial analysis but takes a broader approach to costs and benefits than just financial considerations.

The economic analysis typically encompasses a larger geographic scale, examining the national or regional implications of the project and social and environmental externalities.”

Hydropower sustainability council: Hyrdosustainability.org © Innoval Technology Ltd 2023 | ICJ23-016

Unlocking the Economic Viability of Recycled Aluminium in Manufacturing UK Metals Expo - 2023

Dr Christopher Pilgrim 14th September 2023

www.ktn-uk.org

Environmental impact – Net Zero • Net Zero can’t wait to 2050 • Delink growth in aluminium production and GHG emissions • Electricity decarbonisation, direct emissions reduction and resource efficiency • “To avoid the GHG emissions overshoot, the increase in the demand for virgin aluminium would need to slow and even reverse from current levels.” Eunomia report, 2022, Is Net Zero Enough for the Materials Production Sector? https://www.eunomia.co.uk/reports-tools/is-net-zero-enough-for-the-materials-production-sector/

Recycling is essential but insufficient

Unlocking the economic viability of recycled aluminium

Exporting economic opportunity

Demand for material

Environmental impact

Export millions of tonnes of aluminium as low grade material, import as high grade for billions of £

Customer awareness and demand for recycled materials is increasing.

Under increasing scrutiny.

Recycling can reduce impact but only part of wider solution.

Demand for aluminium is set to increase significantly – must use existing material

Circular Economy Innovation Network - Aluminium

Greener aluminium

Maximise re-used

Do more with less

Alloy design

Maintain value

Innovative thinking

Disassembly & Reuse

Increase recovery systems

Capability training

Certification

Shorter closed loops

New revenue streams

Pathway to accelerating circularity of aluminium

Related Innovate UK programmes & opportunities

Circular Economy Innovation Network

Transforming Foundation Industries

Resource Efficiency for Materials & Manufacture

11th October – Webinar “Taking action towards circularity in aluminium”

Cross-sector collaboration between the Foundation Industries

UK to be a leader in resource efficiency Across all materials

Metals, Cement, Ceramics, Chemicals, Glass, Paper

Inaugural Innovation Pavilion here at UK Metals Expo Stand T34

Expressions of interest: Rapidly find innovative solutions to materials and manufacturing challenges Closes 30th Sept.

How a UK Industrial Strategy Matters and how we get there.

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Introduction It is no coincidence that the UK manufacturing sector is at one of its weakest points in history.

The governments duty is to create a competitive trading environment that allows the UK industry to succeed, grow and lead the green transition.

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Why is an Industrial Strategy Important?

• Vital part of a wider economic toolkit • Offers a clear, long-term vision • Ensures national accountability • Prevents inequality, allows the UK to compete on a global stage • Enables growth in the green economy

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

What steps are needed to implement?

• We need clear objectives • We must learn from international best practice • It should be implemented and governed by a separate body • It needs to deliver on key commitments (skills, infrastructure, finance, R&D, etc...)

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

Considerations for a successful strategy: • Should include horizontal and vertical elements to inspire an integrated industry that accounts for energy and climate policies • Must adapt to changing business environments • Mustn’t protect businesses from transitional change • Should create conditions for new ideas to be commercialised and businesses to grow

0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk

The role of aluminium: • Key to driving industrial change and sustainable progress • Has a significant strategic value to future innovation across multiple sectors (increased investment is essential) • Perfectly positioned to capitalise on demand for sustainable materials • Contributor to key industries • Essential to driving future innovation 0333 240 9735

The Voice of the UK Aluminium Industry

www.alfed.org.uk