Alcan

TARGETing Climate Change
The manner in which individual companies respond to climate change issues may impact their short-term profitability as well as their long-term survival. Alcan has made steady progress over the last decade in reducing greenhouse gases (GHGs) associated with climate change.

Our efforts focus on:

Reducing emissions from production;
Increasing energy efficiency and reducing indirect emissions;
Promoting more efficient use of our products;
Recycling and related stewardship efforts.

We manage greenhouse gas emissions through process modifications and energy and materials conservation. As a result, Alcan's current absolute annual GHG emissions have been reduced by more than 2 million tonnes over the levels of ten years ago. This reduction was achieved despite overall production capacity increases from the restart of idled potlines, the commissioning of a state-of-the-art smelter in Alma, Quebec, and the acquisition of algroup.

Alcan Primary Metal—
Historical Electrical Energy Consumption

(2001 data not available at time of publication)
*2002 forecast to include Alcan's newest smelter in Alma, Quebec

Our aluminum smelting facilities represent our most significant source of greenhouse gas emissions. Through a variety of improvements, smelter carbon intensity has been reduced by over five tonnes of CO₂ equivalent per tonne of aluminum produced. Other sources of GHG emissions include electricity production from non-hydro sources, fossil fuel consumption, process-related emissions and transportation.

Alcan Absolute Emissions Evolution 1999-2001
Versus 1990 adjusted to common asset base

A small percentage of 2000 and 2001 data is estimated.
Actual emissions include equity portion of all assets held at calendar year-end. Adjusted emissions includes the equity portion of all assets currently owned that existed in 1990.
Acquisition of algroup assets is reflected in both adjusted 1990 and actual figures for 2001 only.

Alcan CO₂ Equivalent Emissions 1990-2001
per Tonne of Hot Metal Output

Data includes emissions from assets held at end of calendar year for each period.
Averages are calculated using bauxite, alumina, carbon,
reduction and casting data for Alcan-owned facilities.
Metal output is hot metal from reduction facilities.
Acquisition of algroup assets is reflected in both adjusted
1990 and actual figures for 2001 only.

In 2000, we expanded our earlier efforts to address climate change by developing TARGET, a company-wide greenhouse gas management initiative. Through TARGET, we have improved our methods for measuring, monitoring and determining our emissions inventory. We have also established a global target to achieve an annual reduction of 500,000 tonnes of greenhouse gas emissions by 2004. Alcan will annually set targets for each subsequent year. This effort is expected to yield significant reductions in GHGs over the next decade.

Greenhouse Gases (GHGs) in Aluminum Smelting
Molten aluminum is produced from alumina, which is extracted from mined bauxite. The alumina is reduced into aluminum and oxygen using an electrolytic process requiring an anode and a cathode.

The cathode lines the interior of a "pot", or cell, that holds a liquid mixture of alumina and electrolytic materials. The carbon-based anode is introduced into the solution causing the electrolytic reaction that reduces the alumina. The molten aluminum is extracted and poured into ingots. However, the oxygen combines with carbon from the anodes to form carbon dioxide (a greenhouse gas) and carbon monoxide.

PFC emissions (perfluorocarbons), produced intermittently in the smelting process during what is known as the "anode effect", are also significant GHGs, although to a lesser extent, contributing under 0.5% of the total greenhouse gases from man-made sources.

Anode effects result from increased resistance peaks caused by a temporary drop in alumina concentration in the pot. Alcan's researchers began testing new alumina feed technology in 1992 as a means of reducing anode effect frequency and duration. First introduced at our Grande-Baie smelter in Quebec, the technology was then transferred to other smelters in the Alcan network, reducing PFC emissions by over 90%.

In addition, the program allows for "bankable" improvements to encourage our business units to go beyond their annual reduction goals. Our TARGET program is a comprehensive business approach that is flexible enough to take into account changes in the Company's manufacturing and production capacities and equipment utilization.

Although Alcan's 2001 GHG emissions were not available at the time of publication, initial indications are that Alcan has met and surpassed the 2001 planned reductions of 125,000 tonnes.

Aluminum plays a significant role in reducing greenhouse gas emissions, due in part to its recyclability and its use in certain applications such as transportation (notably in the automotive sector). For example, producing new metal from used aluminum saves up to 95% of the primary aluminum production energy requirements and GHG emissions. In addition, one tonne of aluminum used in place of two tonnes of steel in automobiles can reduce carbon dioxide emissions by as much as 20 tonnes over the life span of the vehicles. Alcan believes in taking a proactive, strategic, life cycle approach to climate change, compatible with the long-term goals of society.

We have also participated in a number of voluntary programs to reduce GHGs such as the Canadian Industry Program for Energy Conservation (CIPEC), the Champions in Action initiative of the Canadian Voluntary Challenge and Registry (VCR), and as a charter member of the U. S. Environmental Protection Agency's Climate Leaders program and Voluntary Aluminum Industrial Partnership (VAIP) for which Alcan won the Climate Protection Award in 2000.

In 2001, Alcan along with other Canadian aluminum companies and the Aluminum Association of Canada worked to develop a voluntary GHG reduction agreement with the Government of Quebec. This is the first of its kind in North America and aims to achieve a 200,000 tonne CO₂ equivalent reduction by the end of 2007.

Alcan Energy Mix 2001