Compared to efforts to agree to an overall carbon pricing mechanism or to binding targets on emissions, sectoral approaches to global binding agreements around greenhouse gasses have made considerably more progress. The Montreal Protocol and a series of follow-on agreements have considerably reduced the production and emission of chlorofluorocarbons and hydrofluorocarbons. The World Maritime Organization is in the process of coming to a global agreement on emissions pricing for maritime transport. The International Civil Aviation Authority’s Carbon Offsetting and Reduction Scheme for International Aviation is a market-based measure designed to offset emissions that are difficult to reduce through operational and technical improvements. There are some moves towards coordinated international reduction of emissions from methane venting and flaring. Economist Scott Barrett at Columbia has proposed that such international sectoral agreements, focused on technology-fuel switching rather than overall national emission reductions, might be a way to make more rapid progress on climate mitigation.
One such class of emissions Barrett discusses involves aluminum. The production of new aluminum accounts for about one percent of global emissions, mostly due to electricity demand for electrolysis of aluminum oxide into aluminum, but also thanks to the emissions released during the production process itself. The International Aluminum Institute, which includes producers responsible for the considerable majority of global production, has played an important role in supporting the industry toward improved environmental standards, including around global commitments toward major reductions in the emissions of PFC pollutants (a powerful greenhouse gas) due to inefficiencies in the electrolysis process.
A next step in reducing emissions in the production process may involve the (approximately) 0.2 percent of global emissions that comes from the use of carbon anodes in the electrolysis process. Currently, the anodes are made of carbon intensive materials which dissolve during electrolysis to release greenhouse gases. The aluminum industry has developed an alternate technology, inert anodes, that are not made from carbon-based products, and so release O2 instead of CO2 during the electrolysis process. This advance has overcome the complex technological challenge of developing a material that (inter alia) conducts electricity but will not bind to oxygen or react with the cryolite in which aluminum oxide is dissolved —all at 960 degrees centigrade.
Inert anodes have recently been deployed in large-scale tests in Rio Tinto’s Alma smelter in Quebec Canada as part of the ELYSIS joint venture of Alcoa, Rio Tinto, and Apple, supported by the Canadian Federal and Quebec Governments. ELYSIS is hoping to have its technology available for installation from 2024 and see large scale production by 2026. Rusal, Russia’s biggest aluminum producer, announced it had also developed inert anode technology in July 2023 and later suggested the technology had been verified by certification company TUV Austria.
Theoretical estimates suggested that inert anodes would be less electricity-efficient than the maximum efficiency of carbon anodes, but the ELYSIS system apparently increases electricity efficiency compared to existing technologies. It may also reduce capital costs. If so, the technology might be expected to spread around the world very rapidly without intervention. But this will depend on factors including technology licensing and conversion costs.
Depending on the extent of barriers to rapid adoption, there might be a role for an international agreement modeled on the Montreal Protocol to foster change. The agreement could (i) decide international targets for inert anode technology adoption, accounting for capacity constraints and differential responsibilities of low- and lower-middle income countries (including major producers India and Mozambique); (ii) adopt an incentive mechanism potentially connected with (eventual) import restrictions on carbon anode aluminum; (iii) provide support to low- and lower-middle income country producers to adopt the new technology. To be effective any agreement would have to involve the active design participation of the world’s largest producer, China. Other major producers include Russia and Canada. An international working group including industry experts, former negotiators, and economists could develop the first draft of a model agreement.
And given the Federal Canadian and Quebec government’s existing commitment to inert anode technology, it seems appropriate that an international initiative might coalesce under a second Montreal Protocol.
