New Delhi, Mar 13 (PTI) Domestic aluminium players would need a substantial increase in their renewable energy or low carbon-intensive power sources to meet their ambitious targets of 25 per cent reduction in carbon emissions in the next five-seven years and achieve net-zero status by 2050, ICRA said on Monday.

"Domestic aluminium manufacturers have the highest carbon intensity of nearly 17-20t CO2e/tonne of aluminium, owing to the significant use of coal in generating captive power," ICRA said.

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According to an ICRA note on the primary aluminium industry, this could entail significant capital investments of up to USD 5 billion by 2030 and USD 20 billion by 2050, depending on the renewable energy (RE) mix used.

However, instead of doing an upfront capex, entities may choose to sign power purchase agreements to secure RE power. Nonetheless, their cost of metal production is expected to rise significantly.

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The carbon intensity of Chinese aluminium producers also remains high due to increased coal usage. However, aluminium entities operating in western economies have gradually switched to lower carbon-intensive hydro-power with almost 60 per cent lower carbon intensity, compared to their Asian counterparts.

"To decarbonise the primary aluminium industry, significant usage of RE power in the entire value chain would be a prerequisite," Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)