Did Aluminum Double in Price Because of 'Green Disruption'?

The price of aluminum has doubled in the last year, and is at its highest price in a decade. This is causing problems for everyone who uses the stuff, like Monster Beverages, which sells a lot of cans. According to the Wall Street Journal, “We just are in uncharted territory,” said Hilton Schlosberg, Monster’s co-chief executive. “I’ve been in this business for a long time ... and I’ve never seen aluminum where it’s at right now.”

Aluminum is such an interesting metal. It's touted as green and sustainable because it is so easy to recycle, and almost everyone who makes anything out of it promises that it is made from recycled aluminum, so it's just fine. Except recycled aluminum isn't good enough for airplanes or cars and certainly not for a MacBook Air; they all need special alloys.

And even with its very high rate of recycling, there isn't enough recycled aluminum to meet demand. Making new aluminum is environmentally destructive and incredibly energy-intensive; it has been nicknamed "solid electricity."

There are a number of reasons for the high prices right now, but one of the main ones is that China has gone from being an exporter of its dirty aluminum made with coal-fired electricity to being an importer. Back in the spring, the Chinese government cut back the amount of electricity that could be produced in coal-fired power plants in inner Mongolia to reduce carbon emissions. According to Andy Home in Reuters, this could be the start of a trend.

"China is embarking on the road to decarbonization, a journey that poses hard questions of a power-hungry sector such as aluminum smelting. Inner Mongolia’s energy problems may be the harbinger of future waves of 'green' disruption in the Chinese aluminum market."

While a lot of aluminum is made with clean hydroelectricity in Canada, Iceland, Norway, and a bit in the USA, China is now producing 58% of the world's aluminum; according to Home, "China produced 36 million tonnes of primary aluminum in 2019 and used 484,342 gigawatt hours of energy to do so, 88% of which was derived from coal." Much of it goes into manufactured products sold in North America and Europe.

Companies like Apple can make a show of recycling their own pre-consumer waste or even investing in "revolutionary" greener aluminum, but everyone else takes what they can get.

If China remains serious about decarbonizing, then the price of aluminum is going to stay high and supplies are going to stay tight. The only way out of this is to reduce demand. As Carl Zimring, author of Aluminum Upcycled, noted,

"Even with such intense and virtuous recycling that we do with aluminum, even if we catch every single can and aluminum foil container, it’s not enough. We still have to use less of the stuff if we are going to stop the environmental destruction and pollution that making virgin aluminum causes."

"Green disruption" may be a term we hear a lot more of in the near future. It takes serious money to have steel made with hydrogen and ships running on methanol. Everything we make and move is going to cost more and be in shorter supply. That's why we have to use less of everything.

But a good place to start is with aluminum, and to disabuse ourselves of the fantasy that aluminum is green. Even the greenest super-aluminum that Tim Cook and Apple have invested in is still made from alumina derived from bauxite. Even the aluminum industry association admits that a beer can is roughly 30% virgin aluminum. Let's stop buying so much stuff made from it; that's the kind of green disruption we need.