Rusal America seeing pull from customers on low-carbon aluminum initiatives: CEO

Rusal America Corp. is starting to see a pull from its customers regarding low-carbon aluminum initiatives, and expects the topic to be a part of the 2022 negotiation season, said company President and CEO Brian Hesse.

Hesse, who has been CEO of Rusal America for two years, told S&P Global Platts in the week started June 20 that the company's customers are wanting to lower their carbon footprint "because their customers want it." He said more customers were asking that some of their contracted value-added products "include a portion for the green side."

He expected that markets would see differentiated pricing for low-carbon aluminum, but "my opinion is that we will get to a green premium before a carbon tax."

For instance, Hess said home improvement retailer Lowe's has started asking for the carbon content in ladders.

"Consumers are concerned about environment, and they are looking for green," he said. "My take is that the generation that is in high school and college, as they get out in the workforce, they will drive these initiatives. They will not put brakes on it. We are on the cusp of a lot of that now."

On billet, Hesse said there is definitely a need for both low-carbon billet and secondary billet "because you cannot use 100% recycled content. You need prime. So, we are seeing a lot of smelters developing something on their own for recycling. I see a need and space for both. Companies that are moving toward more recycled content have four times lower-than-normal primary footprint globally."

Hesse added that the automotive sector has been driving the push for green, as well as building and construction.

"I think it's a great time to be in aluminum industry. I think great things are coming for us over the next five-plus years," Hesse said.

Rusal America is a subsidiary of En+ Group.