NITI Aayog

Choose Report Type

Publications

Publication Date

Thu, 01/22/2026 - 11:34

Report Upload

Download (3.77 MB)

vertical

Energy

PDF Text

Disclaimer
This document is not a statement of policy by the National Institution for Transforming
India (hereinafter referred to as NITI Aayog). It has been prepared for the purpose of
independent academic and policy-oriented research by NITI Aayog with the technical
support of WRI India (legally registered as the India Resources Trust).
Neither NITI Aayog nor WRI India makes any representation or warranty, express or implied,
as to the completeness or reliability of the information, data, findings, or methodology
presented in this document. While due care has been taken by the author(s) in the
preparation of this publication, the content is based on independently procured information
and analysis available at the time of writing and may not reflect the most current policy
developments or datasets.
The assertions, interpretations, and conclusions expressed in this report are those of the
author(s) and do not reflect the views of NITI Aayog, the Government of India, or WRI
India. As such, NITI Aayog and WRI India do not endorse or validate any of the specific
views or policy suggestions made herein by the author(s).
NITI Aayog and WRI India shall not be liable under any circumstances, in law or equity,
for any loss, damage, liability, or expense incurred or suffered as a result of the use of
or reliance upon the contents of this document. Any reference to specific organisations,
products, services, or data sources does not constitute or imply an endorsement by
NITI Aayog or WRI India. Readers are encouraged to independently verify the data and
conduct their own analysis before forming conclusions or taking any policy, academic,
or commercial decisions Roadmap for
Aluminium Sector Decarbonisation iii Roadmap for
Aluminium Sector Decarbonisation iv Roadmap for
Aluminium Sector Decarbonisation vi
Authors and Contributions
Leadership
The team is grateful for the kind mentorship of:
Shri Ishtiyaque Ahmed, Programme Director (Industry & MSME), NITI Aayog
Dr. Anshu Bharadwaj, Programme Director (Green Transition & Climate), NITI Aayog
Shri Rajnath Ram, Adviser (Energy), NITI Aayog
Shri Jawahar Lal, General Manager (Energy), NITI Aayog
Research and Writing Team
Shri Ravi Kumar, Consultant, NITI Aayog
Ms. Anupama Kumari, Consultant, NITI Aayog (Deputation from Vasudha Foundation)
Shri Chandrabhal Chakraborty, Young Professional, NITI Aayog
Shri Vishal Kumar, Young Professional, NITI Aayog
Ms. Jyoti Sharma, Senior Program Associate, WRI India
Shri NGR Kartheek, Senior Program Manager, WRI India
Shri Abhishek Bhardwaj, Senior Program Associate, WRI India
Shri Ankit Pandey (former), Senior Program Associate, WRI India
Peer reviewers
Shri Manoj Kumar Upadhyay, Deputy Adviser, NITI Aayog
Shri R Saravanabhavan, Deputy Adviser, NITI Aayog
Shri Deepak Krishnan, Deputy Director, WRI India
Ms. Shivani Shah, Senior Program Communications Manager, WRI India
Shri Ashim Roy, Lead - Energy Finance, WRI India
Ms. Gowthami T S, Program Manager, WRI India
Ms. Ankita Gangotra (former), Senior Manager, WRI US
Shri Shravan Kr. Pushkar, Consultant, NITI Aayog
Shri Saksham Agarwal, YP, NITI Aayog
Shri Anurag Pandey, YP, NITI Aayog Roadmap for
Aluminium Sector Decarbonisation vii
Acknowledgement
We would also like to thank the following stakeholders who provided valuable inputs
in shaping the report:
Shri Ghanshyam Prasad, Chairperson, Central Electricity Authority
Dr. Anupam Agnihotri, Director, JNARDDC - Nagpur
Shri R.K. Mittal, Director, Central Electricity Authority
Shri Sachin Khasabha Bhise, Director, Central Electricity Authority
Shri Vivek Kumar Sharma, Director, Ministry of Mines
Shri Goutam Ghosh, Chief Engineer, Central Electricity Authority
Shri Vijay Meghani, Chief Engineer, Central Electricity Authority
Shri Manoj Kumar, Dy. Director, Central Electricity Authority
Shri Anshuman Swain, Dy. Director, Central Electricity Authority
Shri Sunil Kisan Khandare, Director, Bureau of Energy Efficiency
Shri Ravi Prajapati, Joint Director, Bureau of Energy Efficiency
Shri Jagadeesan V, Sector Expert, Bureau of Energy Efficiency
Shri Shrinath Chauhan, Under Secretary, Ministry of Mines
Dr. R. N. Chouhan, Senior Principal Scientist, JNARDDC - Nagpur
Shri Biju K, GM, NALCO
Shri Subrata Mohanty, GM, NALCO
Shri Anuj Kumar Panda, GM, NALCO
Shri Abhishek Kumar, Manager, Aditya Birla Group
Shri Anil Mathew, President, HINDALCO
Shri Debasish Ghosh, Vice-President, HINDALCO
Shri Rahul K, Assistant Manager, HINDALCO
Ms. Sumita Singh, Corporate & Policy Affairs, HINDALCO
Ms. Prachi Priya, AVP, Policy & ESG, HINDALCO
Shri Naveen Pant, Branch Head (GM), Jindal Aluminium
Dr. Amit Kumar Tyagi, Head & AVP, Vedanta
Shri Mitesh Pandya, Head, Vedanta Roadmap for
Aluminium Sector Decarbonisation viii
Preface
India’s pursuit of sustainable and inclusive growth demands a delicate balance between
economic advancement and environmental responsibility. Among the key sectors driving
this progress, the aluminium industry is a vital enabler of the nation’s economic development
and energy transition. India is a major primary aluminium producer, accounting for 6%
of the global aluminium production. Production is expected to rise from 4 MT in 2023
to 37 MT in 2070. However, this expansion will face several challenges, as the sector is
projected to increase GHG emissions from 83 million tonnes of CO
2
equivalent (MTCO
2
e)
to 376 MTCO
2
e annually in 2070, under the Business-As-Usual scenario.
This challenge of meeting apparently contradictory goals of growing demand while
addressing environmental concerns underscores the need for a strategy that aligns
industrial growth with climate action. Recognising this imperative, the report, ‘Road
Map for Aluminium Sector Decarbonisation’, provides a thorough roadmap to guide
the sector toward a sustainable future. It outlines an incremental, long-term approach
to significantly reduce emissions while ensuring the sector’s continued contribution to
India’s economic progress.
At the heart of this roadmap is the decarbonisation of power supply to the aluminium
sector, as it accounts for most of the emissions in the sector. To decarbonise the associated
emissions, three transformative solutions have been prioritised: expansion of renewable
energy, direct supply of nuclear energy, and carbon capture, utilisation, & storage (CCUS)
technologies for captive coal plants. This combination of technological developments,
market-driven schemes, and policy interventions offers a practical, ambitious, and cost-
effective pathway to decarbonisation.
By 2030, the proposed measures have the potential to deliver a measurable short-term
impact, including significant emission reductions of about 10%, expansion of renewable
power capacity, creation of green jobs, and attracting investments. These outcomes
make it clear that decarbonisation is not merely an environmental necessity but also a
transformative economic opportunity, enabling the emission-intensive aluminium sector
to thrive in a low-carbon economy.
The roadmap is not just a strategy for emissions abatement; it is a vision for a thriving
and sustainable aluminium industry in a low-carbon economy. It equips the sector to
harbour innovation, lower costs, and enhance its global competitiveness in an increasingly
sustainability-conscious market. This report marks the first step in positioning India’s
aluminium industry as a model for sustainable industrial development.
This report will guide and inform policymakers, industry leaders, and stakeholders,
encouraging collaborative efforts to build a resilient and sustainable economy for the nation. Foreword & Acknowledgement 1
st
Floor, Godrej & Boyce Premises, Gasworks Lane, Lalbaug, Parel, Mumbai 400012, India. (PH) +91 22 24713591
---------------------------------------------------------------------------------------------------------------------------------------------
WRI India, is an independent charity legally registered as the India Resources Trust (IRT).
Message, CEO, WRI India
India’s net-zero by 2070 is a climate imperative and an opportunity for India to lead in low-carbon industrial
growth. Aluminium, one of the most energy-intensive and economically relevant industries, holds great
significance in this transition. In 2023, production of aluminium accounted for about 2.8 % of India's total
GHG emissions. A majority of these emissions are from coal-based captive power consumed in the smelting
stage. With evolving markets and increasing demand for greener materials, the urgency from aluminium
manufacturers is greater, as their customer base moves toward demanding low-carbon alternatives across the
automotive, packaging, and construction sectors.
India's domestic demand for aluminium is projected to increase sharply from 4 million tonnes in 2023 to over
37 million tonnes by 2070, almost three times the projected global growth rate. The surge will be driven by
rapid urbanisation, rising per capita consumption, and the growth of clean energy and electric vehicle
applications. A consequence is that not only will India play a critical role in shaping domestic consumption
but also impact global supply chains and decarbonisation strategies in the aluminium industry. If India's
aluminium industry is to remain competitive, it needs to switch decisively to cleaner energy inputs while
continuing to grow and meet the rising domestic demand.
This roadmap presents a clear and technically sound strategy for decarbonising the aluminium sector. It
identifies three high-impact solutions that together offer a phased, feasible decarbonisation strategy: (1)
immediate adoption of RE-RTC, (2) captive nuclear power in the medium term, and (3) CCUS for coal-based
power in the long term. These three solutions have emerged from detailed cost and impact assessments and
represent a consensus among stakeholders on what is feasible in the Indian context. Implementation entails
significant investment and regulatory support. The benefits are quite substantial. Decarbonisation of the
aluminium sector can drive energy cost savings over time, unlock access to global green markets, and future-
proof the sector against climate-related trade and geopolitical risks.
This roadmap presents a clear strategy for strengthening India's position in the aluminium industry. It draws
from deep analysis, stakeholder consensus, and strong alignment with national priorities. With rising
demand, expanding global relevance, and a clear roadmap in place, the decarbonisation of India's aluminium
sector will be defined by the actions we take today. This roadmap is a call to action for industry, government,
and partners to begin that journey now.
(Madhav Pai)
CEO, WRI India 1
st
Floor, Godrej & Boyce Premises, Gasworks Lane, Lalbaug, Parel, Mumbai 400012, India. (PH) +91 22 24713591
---------------------------------------------------------------------------------------------------------------------------------------------
WRI India, is an independent charity legally registered as the India Resources Trust (IRT).
Message, CEO, WRI India
India’s net-zero by 2070 is a climate imperative and an opportunity for India to lead in low-carbon industrial
growth. Aluminium, one of the most energy-intensive and economically relevant industries, holds great
significance in this transition. In 2023, production of aluminium accounted for about 2.8 % of India's total
GHG emissions. A majority of these emissions are from coal-based captive power consumed in the smelting
stage. With evolving markets and increasing demand for greener materials, the urgency from aluminium
manufacturers is greater, as their customer base moves toward demanding low-carbon alternatives across the
automotive, packaging, and construction sectors.
India's domestic demand for aluminium is projected to increase sharply from 4 million tonnes in 2023 to over
37 million tonnes by 2070, almost three times the projected global growth rate. The surge will be driven by
rapid urbanisation, rising per capita consumption, and the growth of clean energy and electric vehicle
applications. A consequence is that not only will India play a critical role in shaping domestic consumption
but also impact global supply chains and decarbonisation strategies in the aluminium industry. If India's
aluminium industry is to remain competitive, it needs to switch decisively to cleaner energy inputs while
continuing to grow and meet the rising domestic demand.
This roadmap presents a clear and technically sound strategy for decarbonising the aluminium sector. It
identifies three high-impact solutions that together offer a phased, feasible decarbonisation strategy: (1)
immediate adoption of RE-RTC, (2) captive nuclear power in the medium term, and (3) CCUS for coal-based
power in the long term. These three solutions have emerged from detailed cost and impact assessments and
represent a consensus among stakeholders on what is feasible in the Indian context. Implementation entails
significant investment and regulatory support. The benefits are quite substantial. Decarbonisation of the
aluminium sector can drive energy cost savings over time, unlock access to global green markets, and future-
proof the sector against climate-related trade and geopolitical risks.
This roadmap presents a clear strategy for strengthening India's position in the aluminium industry. It draws
from deep analysis, stakeholder consensus, and strong alignment with national priorities. With rising
demand, expanding global relevance, and a clear roadmap in place, the decarbonisation of India's aluminium
sector will be defined by the actions we take today. This roadmap is a call to action for industry, government,
and partners to begin that journey now.
(Madhav Pai)
CEO, WRI India Roadmap for
Aluminium Sector Decarbonisation xiv
List of Figures........................................................................................................................xvi
List of Tables........................................................................................................................xvii
List of Abbreviations��xviii
Executive Summary...............................................................................................................xxii
Chapter 1: Introduction.............................................................................................................2
1.1 Background ............................................................................................................................2
1.2 Working Group and Terms of Reference .................................................................. 3
1.3 Methodology..........................................................................................................................3
1.3.1 Scope and Approach of the Study............................................................................3
1.3.2 Research Methodology.................................................................................................5
Chapter 2: Overview of the aluminium industry...................................................................8
2.1 Global Aluminium Outlook..............................................................................................12
2.1.1 Global Demand Outlook.............................................................................................12
2.1.2 Global Supply Trends...................................................................................................13
2.2 India Aluminium Outlook.................................................................................................14
2.2.1 India Demand Outlook................................................................................................14
2.2.2 India Aluminium Supply Outlook��15
2.3 Overview of aluminium sector related emissions in India...................................16
2.4 Primary Aluminium potential areas for decarbonisation ...................................18
2.5 Secondary Aluminium Production as a lever of emissions abatement ��21
Chapter 3: Key levers for decarbonising India’s aluminium sector................................26
3.1 Non-electricity Decarbonisation Measures.............................................................. 26
3.1.1 Refinery decarbonisation levers..............................................................................27
3.1.2 Smelter Decarbonisation Levers.............................................................................29
3.1.3 Other Novel Technologies for Decarbonisation.................................................30
Table Of Contents Roadmap for
Aluminium Sector Decarbonisation xv
3.2 Electricity Decarbonisation Measures........................................................................34
3.2.1 Role of Clean Energy in Smelting...........................................................................36
3.2.2 Challenges in Power Decarbonisation for Smelting..........................................40
3.3 Progress in Decarbonisation of the Indian Aluminium Industry.......................41
3.3.1 Role of the Perform, Achieve, and Trade (PAT) Scheme................................42
3.3.2 Other Steps Being Taken by the Industry Towards Decarbonisation..........44
3.4 Identification of Prioritised Solutions.........................................................................45
3.4.1 Initial Sub-categorisation...........................................................................................45
3.4.2 Priorities for Achieving Emission Reduction ......................................................47
Chapter 4: Recommendations and Conclusion.................................................................54
4.1 Short-term: RE-RTC..........................................................................................................54
4.2 Medium-term: Nuclear Power.......................................................................................54
4.3 Long-term: Coal-based CPP+CCUS............................................................................55
4.4 Recommendations.............................................................................................................56
4.5 Conclusion and Way forward........................................................................................59
References��62
Annexure 1��68
Annexure 2��69 Roadmap for
Aluminium Sector Decarbonisation xvi
List of Figures
Figure 1 Flow of both upstream and downstream processes 4
Figure 2 Step-by-step process of making Aluminium8
Figure 3 Life cycle of aluminium9
Figure 4 Process diagram of primary aluminium production10
Figure 5 Global primary aluminium production share by regions11
Figure 6 Global aluminium demand12
Figure 7 Global aluminium supply (Primary and Secondary), million tonnes13
Figure 8 Production (Primary + Secondary) comparison of India with the world15
Figure 9 Forecast primary and secondary aluminium supply share in India16
Figure 10 CO
2
e emissions intensity for Indian aluminium industry in 202317
Figure 11
CO
2
e emissions by unit process in each process step for Indian aluminium
industry in 2023.
17
Figure 12
Process-wise potential areas for decarbonisation of Indian
aluminium industry.
19
Figure 13
Marginal Abatement Cost Curve (MACC) of a coal-based aluminium plant
(non - electricity decarbonisation measures)
26
Figure 14 Levers for refinery decarbonisation28
Figure 15 Levers for smelter decarbonisation29
Figure 16
Non-electricity moonshot technologies for mid-to-long-term
decarbonisation.
31
Figure 17 Greenfield capex in EU and North America of refining & smelting, USD/t Al.32
Figure 18 Typical aluminium production cost breakup, India, percent34
Figure 19 Primary aluminium production emissions based on energy source35
Figure 20 Global usage share by power type in aluminium production36
Figure 21 Smelter electricity decarbonisation potential archetypes37
Figure 22 Graph showing aluminium temperature profile after shutdown in a cell.41
Figure 23 Indian aluminium industries’ progress in emissions intensity.42
Figure 24 EE gains achieved by industry through PAT cycles.43
Figure 25 Prioritised solutions for decarbonising primary aluminium sector electricity48 Roadmap for
Aluminium Sector Decarbonisation xvii
List of Tables
Table 1 Comparative analysis - PHS vs BESS39
Table 2 The sectoral technical working committee on Aluminium68
Table 3 Comprehensive list of 30 initiatives for decarbonisation69 Roadmap for
Aluminium Sector Decarbonisation xviii
List of Abbreviations
BATBest Available Technology
BEEBureau of Energy Efficiency
BESSBattery Energy Storage Systems
BECCUS Biomass Energy with CCUS
BSRBharat Small Reactor
CAGRCompound Annual Growth Rate
CAPEX Capital Expenditure
CBAMCarbon Border Adjustment Mechanism
CCSCarbon Capture and Storage
CCUCarbon Capture and Utilisation
CCUSCarbon Capture Utilisation and Storage
CEACentral Electricity Authority
CEEWCouncil on Energy, Environment and Water
CFDComputational Fluid Dynamics
CHPCombined Heat and Power
CIIConfederation of Indian Industry
CILMS Composite Islanding and Load Management System
CISCommonwealth of Independent States
CPPCaptive Power Plant
CCTSCarbon Credit Trading Scheme
CO
2
Carbon Dioxide
CSPConcentrated Solar Power
CTUCentral Transmission Utility
CUFCapacity Utilisation Factor
GDPGross Domestic Product
DAEDepartment of Atomic Energy
DISCOMs Distribution Companies
EEEnergy Efficiency
EPCEngineering, Procurement and Construction
EPRExtended Producer Responsibility
ESPsElectrostatic Precipitators Roadmap for
Aluminium Sector Decarbonisation xix
EVsElectric Vehicles
GH2Green Hydrogen
GHGGreenhouse Gases
GJGiga Joule
GTCO
2
e Giga tonnes CO
2
equivalent
HHHall-Héroult
HINDALCO Hindustan Aluminium Corporation
IAIInternational Aluminium Institute
IPCCInter-governmental Panel on Climate Change
IPPIndependent Power Producer
ISTSInter-state Transmission System
JNARDDC Jawaharlal Nehru Aluminium Research Development Centre
kWhKilo Watt Hour
LNGLiquefied Natural Gas
LCOELevelised Cost of Electricity
MACCMarginal Abatement Cost Curve
MNREMinistry of New and Renewable Energy
MoPMinistry of Power
MSWMunicipal Solid Waste
MVRMechanical Vapor Recompression
MTMillion Tonnes
MTPAMillion Tonnes Per Annum
MtoeMillion Tonnes of Oil Equivalent
MTCO
2
e Million Tonnes CO
2
Equivalent
MWhMegawatt Hour
NALCO National Aluminium Company
NDCsNationally Determined Contributions
NPCIL Nuclear Power Corporation of India Limited
NGNatural Gas
OPEXOperational Expenditure
PATPerform, Achieve and Trade
PFCsPerfluorocarbons
PHSPumped Hydro Storage Roadmap for
Aluminium Sector Decarbonisation xx
PLFPlant Load Factor
PLIsProduction-Linked Incentives
PPAPower Purchase Agreement
PVPhotovoltaic
RERenewable Energy
RPORenewable Purchase Obligation
RTCRound-the-Clock
SECISolar Energy Corporation of India Limited
SHANTI
Sustainable Harnessing and Advancement of Nuclear Energy for
Transforming India Act, 2025
SMRsSmall Modular Reactors
STUState Transmission Utility
VGFViability Gap Funding
WACCWeighted Average Cost of Capital
WEFWorld Economic Forum Roadmap for
Aluminium Sector Decarbonisation xxii
Executive Summary
The aluminium industry stands at a pivotal crossroads in its decarbonisation journey. As
a key contributor to India’s economy and industrial growth, the sector needs to adapt
emerging global sustainability trends and ambitious emissions reduction targets. Aluminium
production accounted for approximately 2.8% of India’s GHG emissions or 83 MTCO
2
e
in 2023, and without intervention, emissions could rise to 376 MTCO
2
e by 2070. With a
national average emission intensity of 20 - 21 tCO
2
/t of aluminium, significantly higher
than the global average of 15 tCO
2
/t, the sector clearly needs transformation.
The aluminium sector is hard-to-abate, owing to its high electricity consumption, met by
coal-based electricity. Hence, reducing its carbon footprint is vital, not only to support
India’s net-zero goals but also mitigate export risks from emerging trade regulations,
i.e. the EU’s CBAM. As other nations develop low-carbon technologies & create trade
measures based on embedded emissions, India’s aluminium industry is presented with
an opportunity to lower its emission intensity to be a global leader in sustainable metal
manufacturing. This will also drive India’s clean energy transition in longer run.
The global trends clearly indicate the increasing demand for low-carbon aluminium,
induced by regulations and consumer choices across the automobile, packaging, and
construction sectors. However, aluminium faces competition from other materials like
steel and plastics, currently with a better carbon footprint. Thus, merely if the Indian
aluminium industry wants to be on par with global market requirements, the shift has to
be toward cleaner production routes while keeping costs under check.
Accordingly, the Working Group constituted by NITI Aayog on decarbonisation of aluminium
assessed 30 proposed solutions under the decarbonisation roadmap. Low-impact options
were de-prioritised, while the high-impact solutions were categorised into three main
approaches. All three of these approaches focus on reducing emissions from electricity,
which remains the largest source of emissions in this sector. In-depth technical and
economic analysis was performed for each of the selected solutions, including detailed
cost estimates, as well as additional support measures that would enable successful
implementation. This assessment encapsulates the findings of many stakeholder discussions
and represents practical implementation.
A value chain analysis carried out on aluminium production-from the mining of its raw
materials to the production of finished metal-revealed that most of the emissions take place
at the smelting stage, where alumina is being turned into metallic aluminium. Moreover,
most of the emissions are related to the energy required for this process. Hence, most
of the potential for decarbonisation and resulting solutions are related to a reduction of
emissions linked with power generation. This is critical since the sector maintains a fleet
of captive coal-power generators to ensure a continuous power supply. Roadmap for
Aluminium Sector Decarbonisation xxiii
The three prioritised solutions include:
(i) Short-term (till 2030): Transition to Renewable Energy-Round the Clock (RE-
RTC) power and Grid connection.
(ii) Medium-term (2030 - 40): Adoption of nuclear power.
(iii) Long-term (2040 and beyond): Integration of Carbon Capture Utilisation and
Storage (CCUS) with captive coal-based generation.
While RE-RTC presents a viable short-term solution, it poses operational challenges for
aluminium smelters, which require continuous and uninterrupted power supply, placing
high demands on the reliability of RTC mechanisms. Nuclear power provides a stable
and low-emission source for the medium term but at a high upfront capital cost and
with challenging regulatory, permitting, and public perception issues. CCUS is critical to
long-term decarbonisation but faces high costs, infrastructure, and uncertainty regarding
carbon transport and storage. Roadmap for
Aluminium Sector Decarbonisation xxiv Roadmap for
Aluminium Sector Decarbonisation 1
Chapter 1:
Introduction Roadmap for
Aluminium Sector Decarbonisation 2
Chapter 1: Introduction
1.1 Background
The IPCC reports working group III -Climate Change: Mitigation of Climate Change
2022 highlights that net GHG emissions have risen across all major sectors since
2010, with the industrial sector contributing 24% of the total global GHG emissions
in 2019, equating to 14 GTCO
2
e globally on account of heavy reliance on fossil fuels
and energy-intensive process. As part of the industrial sector, the global aluminium
industry is responsible for approximately 2% of total global GHG emissions, releasing
over 1.1 GTCO
2
e of emissions each year.
Over the past decade, direct emissions from the global aluminium industry have been
on the rise due to increased production, a trend expected to continue with population
and economic growth. In the road transport sector, aluminium is increasingly used
in vehicle construction to lower the energy consumption of EVs due to its high
strength-to-weight ratio, and in manufacturing battery pack enclosures because of
its thermal conductivity and durability. Because of such properties, it also serves
as an important material in components for the generation of clean energy, such as
wind turbines and solar panels.
Aluminium is the key metal for clean energy, mobility, and infrastructure in India.
Further, as per Aluminium Vision Document, there is a need to ensure raw material
security for bauxite supply, simplify regulatory procedures to streamline processes,
and deploy clean technologies across the value chain. It further calls for enhanced
institutional collaboration, close industry-government partnership, and policy support
to enable the integration of renewable energy, efficient recycling, and low-carbon
production methodologies. These will be needed in order to build a flexible and
climate-friendly Indian aluminium industry.
In this context, it is crucial to clearly identify viable options for reducing carbon emissions
in aluminium production and recycling, following the best emission-reduction pathways
based on the latest scientific advancements. With global demand for aluminium
expected to rise, particularly low-carbon demand driven by sectors that mitigate
climate change, a detailed analysis of available technologies and decarbonisation
options across the value chain is essential, not only to reduce GHG emissions but
also to maintain cost competitiveness and secure access to low-carbon markets.
The pathway of achieving net-zero emissions has attracted considerable attention with
respect to finding technological solutions and a transition strategy for the aluminium
industry. For example, major international industry associations such as the International
Aluminium Institute (IAl) have worked on outlining a global vision of the low-carbon
future of industry. Yet, region-specific emission and technology pathways consistent
with the 1.5°C target, reflecting local conditions of the industries, remain absent.
The aluminium industry is a key player both in terms of economic output and
employment generation in India’s industrial economy. Although it still lags the steel
sector, which has maintained a consumption level of 12%, and the cement sector at 9%, Roadmap for
Aluminium Sector Decarbonisation 3
aluminium still constitutes about 2% of the manufacturing GDP, thus supporting and
provides 80,000 jobs directly and indirectly (NITI Aayog, 2017). With the manufacturing
sector in India growing, the contribution by aluminium will further increase.
That said, it is a huge climate challenge. The sector accounts for about 2.8% of India’s
total GHG emissions, largely due to its dependence on coal-based electricity and
other energy-intensive processes (CEEW, 2024).
While there is indeed progress over the years, especially in primary production, semi
fabrication, and recycling, this transition needs to be accelerated further. NITI Aayog
has mapped emission sources in the entire value chain of aluminium production
and identified feasible strategies for decarbonising the sector. This covers major
technologies already deployed, emerging low-carbon options, and prioritising action
in line with India’s climate obligations under global 1.5°C goals.
1.2 Working Group and Terms of Reference
India has committed to transitioning towards an environmentally sustainable economy.
At the Conference of the Parties (COP) 26 in 2021, India announced its ambition to
achieve net-zero emissions by 2070. This commitment was subsequently reaffirmed
and detailed in official government communication (PIB, 2023). Decarbonisation of the
industrial sector will be critical to realise India’s international commitments on climate
change. The industrial sector is diverse and therefore it is felt that sectoral roadmaps,
especially hard-to-abate sectors, will be the way forward towards green transition.
In view of the above, the objective is to take a comprehensive approach and formulate
a sectoral decarbonisation roadmap for selected hard-to-abate sectors, i.e. aluminium,
cement, and the MSME sector. NITI Aayog constituted three working groups focusing
on each of these sectors. The details of the sectoral technical working committee
on aluminium are available in Annexure 1.
1.3 Methodology
1.3.1 Scope and Approach of the Study
The scope of this study focuses primarily on the aluminium industry’s upstream
processes (Scope 1 and 2 emissions), which includes bauxite mining, alumina
refining, and primary aluminium smelting. However, Figure 1 illustrates the
comprehensive flow of both upstream and downstream processes. Roadmap for
Aluminium Sector Decarbonisation 4
Bauxite mining
Alumina refining
Primary Aluminium
smelting
Secondary
Aluminium
Casting
Scope 1Diesel consumptionEmissions from steam
production
Emissions from calcination
Emissions from anode
Emissions from self
generated electricity
Perfluorocarbon emissions
from anode effects
Emissions from gas burningEmissions from gas burning
Scope 3Diesel transport to plant
Transport of consumables to
plant
Consumables at the mine
(tires, …)
Scope 1+2 from Bauxite
production
Transport of bauxite to plant
Lime production + transport
Caustic soda production
+transport
Scope 1+2+3 from alumina
production
Transport of Alumina and
other raw materials
Emission from Aluminium
fluoride production
Emissions of cathode
Emissions of other raw
materials (pet coke)
Emission from transport
scrap
Emission from scrap sorting
(and processing)
Scope 1/2/3 Emission from
Aluminium ingot (secondary
or primary)
Emission from transport of
input material
Emission from alloys
Scope 2
i
Energy consumption
(washing plant, crushing, …)
Electricity consumption in
plant
Emissions from purchased
electricity
Emissions from purchased
electricity
Emissions from purchased
electricity
UpstreamDownstream
i. When energy production is not done on site
Source: (International Aluminium institute, 2023)
Figure 1: Flow of both upstream and downstream processes Roadmap for
Aluminium Sector Decarbonisation 5
1.3.2 Research Methodology
The Indian aluminium industry’s potential for reducing carbon emissions was examined
using a mixed-method approach. This involved a literature review, stakeholder
consultations, comparative analysis, and quantitative data analysis.
Literature review: For the literature review and comparative analysis, the researchers
began by conducting a detailed global and Indian source review of decarbonisation
strategies, technologies, and policies. They undertook a study of relevant peer-reviewed
journals, industry reports, and case studies. This helped them see the prevailing trends
and challenges facing the aluminium sector. A comparative analysis evaluated the
Indian aluminium industry against global best practices concerning energy efficiency,
emissions intensity, and technological use to indicate areas where improvement is
required or could be potentially led.
Stakeholder consultation: The stakeholder consultations entailed more than 20
discussions with the government, including BEE industry experts, and technology
providers. One multi-stakeholder workshop was organised at the end of Phase 1 of
the study. These engagements pointed out reduction measures that were feasible
and probed realistic means of pursuing those options. In Phase 2, there were four
working group meetings with NITI Aayog, McKinsey, and industry participants to
discuss emission reduction measures and detail implementation pathways.
Quantitative analysis: This was performed by the researchers through industry data,
sustainability reports, and proprietary models for assessing the levels of emissions, the
economic feasibility of interventions, and policy measures. Over 20 secondary sources,
such as Council on Energy, Environment and Water (CEEW), Confederation of Indian
Industry (CII), International Aluminium Institute (IAI), and World Economic Forum
(WEF), were referenced to ensure the results are relevant locally while maintaining
a global outlook. The report also integrated the results from McKinsey’s Minespans
to firm up the analytical base. Roadmap for
Aluminium Sector Decarbonisation 6 Roadmap for
Aluminium Sector Decarbonisation 7
Chapter 2:
Overview of the
Aluminium Industry Roadmap for
Aluminium Sector Decarbonisation 8
Chapter 2: Overview of Aluminium
Industry
The formulation of a robust decarbonisation roadmap requires a comprehensive understanding
of its production routes, associated emissions, and evolving global benchmarks, given
the central role of aluminium in India’s clean energy ambitions. Aluminium does not
occur in metallic form in nature and is produced through a multi-step industrial value
chain (Figure 2 and Figure 3). The production of aluminium has been broadly classified
into two streams:
•
Primary aluminium production is a process of metal extraction from raw materials.
• Secondary aluminium production relies on pre- and post-consumer scrap recycling.
Figure 2: Step-by-step process of making Aluminium
Source: (Ministry of Mines)
In the conventional method, ore containing between 40 and 60 percent aluminium oxide
is extracted through bauxite mining. This is usually followed by alumina refining, which
is a chemical process designed to purify bauxite into 99% pure alumina in white powder
form (Histalu 2024). In turn, the resulting alumina is reduced to metallic aluminium by
electrolysis, usually performed in carbon-intensive facilities as a result of reliance on
fossil-fuel-based electricity.
This metal, after alloying and casting, is rolled or extruded to produce various forms
of semi-finished products for different industries. These eventually become finished
goods, which after their useful life are returned to the production cycle via scrap sorting,
processing, and recycling. Roadmap for
Aluminium Sector Decarbonisation 9
Figure 3: Life cycle of aluminium
Scrap processing
and Recycling
End of
Product
life
Product
in use
Product
Manufacture
Rolling/
Extrusion
Process
Ingot
Alloying
& Casting
Primary
Metal
Smelting
Alumina
Refining
Bauxite
Extraction
Fabrication
scrap
Secondary aluminium is ~95% less emission-intensive than primary aluminium production because recycling saves
~95% of the energy (~13-14 kWh of electrical energy /kg on average consumed in primary production)
Very low scope for further decarbonisation of secondary aluminium – growth of metals recycling industry not covered
under scope of the committee
Source: (Hulamin, International Aluminium Institute 2020, Ministry of Mines, India)
As shown in Figure 4, out of each four tonnes of bauxite ore, approximately two tonnes of
alumina are produced. Further, the smelting of alumina produces approximately 1 tonne
of aluminium. The production of aluminium is a capital and energy-intensive process.
In sum, the cost of alumina, power and labour account for about 75-80% of the total
production cost of aluminium (NITI Aayog 2017).
Figure 4: Process diagram of primary aluminium production
Bauxite mining
Alumina
Refining
Aluminium Smelting
Anode
Production
Oil
~ 4 t bauxite
1 T Aluminium
Fuel
Petrol
coke
Pitch
Caustic Soda
(NaOH)
ElectricityMolten Cryolite (Na3AlF6)
Source: (Author’s compilation) Roadmap for
Aluminium Sector Decarbonisation 10
The recycling stage gives rise to secondary aluminium, one of the important avenues
for circularity and emission reduction. The emission intensity of aluminium production
also depends vastly on the type of feedstock used and the source of energy powering
the process. Similarly, both primary and secondary production can be divided into five
distinct categories, each representing a different profile of emissions.
Primary: Conventional primary aluminium with the highest emissions, reliant on fossil
fuels and less efficient technologies.
Primary (Low CO₂): Primary aluminium with reduced emissions achieved by using cleaner
sources and improving energy efficiency in the production process but higher emissions
than ultra-low
Primary (Ultra-low CO₂): Primary aluminium produced with emissions <2 tCO₂/tAl (IAI
2024) achieved through advanced technologies and RE integration.
Secondary (Grey): aluminium originating from pre-consumer scrap may have higher
emissions attributed to the energy-intensive nature of recycling processes and the quality
of scrap used.
Secondary (Green): This route utilises aluminium from post-consumer scrap and green
energy sources.
About 70% of global aluminium production still comes from the primary route, i.e., smelting,
with a significant share still based on emission-intensive processes, such as grey primary
production. The rest consists of secondary aluminium, both green and grey, which depends
on the scrap supply and energy mix during recycling. Global primary aluminium production
is highly concentrated in a few nations. As depicted in Figure 5, China has 68%, the
dominant share of the global primary aluminium, while Russia and India each contribute
6%. This positions India among the top three producers and makes it a strategic country
for low-carbon transition of the sector. Hence, India’s decarbonisation of its aluminium
industry, especially the primary sub-sector, will be crucial not just for India’s national
climate goals, but also for global industrial emissions abatement. Roadmap for
Aluminium Sector Decarbonisation 11
Source: (International Aluminium Organisation, CRISIL, Indian Mineral Yearbook)
Figure 5: Global primary aluminium production share by regions Roadmap for
Aluminium Sector Decarbonisation 12
2.1 Global Aluminium Outlook
At a period when the aluminium industry is witnessing a transformation driven by global
decarbonisation demands, regulatory actions, and evolving consumer preferences,
the demand for clean aluminium is gaining traction globally.
2.1.1 Global Demand Outlook
Global aluminium demand is undergoing a remarkable shift towards low-emission
products, with end-use sectors taking concrete steps to reduce embedded
carbon in their products. Figure 6 shows the expanding global demand for
aluminium, from 86 MT in 2020 to 142 MT by 2040. This growth is accompanied
by changing composition of aluminium demand, by source. In 2020, grey primary
aluminium accounted for 71% of total demand. Howeverby 2040, this would
have been reduced to 27%, a reflection of the shift to low-emission alternatives.
Green secondary aluminium demand exhibits momentum, from 14 MT in 2020
to 38 MT by 2040 with an effective CAGR of around 5%. Ultra-low CO₂ primary
aluminium is expected to start from 2 MT in 2030 and gradually expand, reaching
9 MT by 2040.
These numbers illustrate the unstoppable transition across global supply chains
toward cleaner aluminium production.
Figure 6: Global aluminium demand
i Post-consumer scrap, and scrap from green primary sources on a regional level
ii Pre-consumer scrap from primary sources > 4 tC02/tAl
Source: (MineSpans, McKinsey Aluminium decarbonisation pathway model Q2 2024)
The decarbonisation trend is strongly driven by demand from the automotive and
packaging sectors, particularly in Europe and North America. These regions are acting Roadmap for
Aluminium Sector Decarbonisation 13
toward ambitious climate goals and regulatory mechanisms, such as the EU’s CBAM, which
creates incentives to use low-carbon materials. Consequently, procurement decisions are
increasingly shaped by the carbon intensity of aluminium, encouraging the industry to
adopt cleaner production technologies and increase recycling of green scrap.
2.1.2 Global Supply Trends
The supply scenario for the aluminium industry is changing gradually, not only
in terms of overall output but also in its shift towards low-emission processes
of production. The total global aluminium supply is projected to rise from 95
MT in 2022 to 136 MT by 2040, as depicted in Figure 7. Not only is the overall
volume on the rise, but the composition of supplies is also undergoing remarkable
change. As discussed above, the share of high-emission primary grey aluminium
will decline from around 71% in 2020 to just about 27% in 2040, with producers
turning to greener alternatives.
Figure 7: Global Aluminium Supply (Primary and Secondary), million tonnes
i Absolute emissions across the entire aluminium value chain, from bauxite mining to semis production
Source: (McKinsey 2024)
One key driver is the rising output of primary low-CO₂ aluminium, which will reach
around 29 MT by 2030, reflecting the industry’s improving potential to avoid emissions
thanks to better electrification and other process efficiencies. The production of
primary ultra-low CO₂ aluminium through futuristic technologies-essentially comprising
hydrogen-based refining, carbon-chlorination with CO regeneration, and inert
anodes-will remain very low, below 0.5 MT in 2030. These technologies hold major
uncertainties, in particular with regard to anode material performance, and are still
at the research stage. Roadmap for
Aluminium Sector Decarbonisation 14
Looking to 2040, ultra-low CO₂ aluminium supply is expected to increase to around 7
MT as these technologies mature and scale. Meanwhile, the industry’s total emissions
are projected to drop drastically, from over 1,000 MT today to approximately 770
MT in 2040, marking a steady but essential transition across the value chain.
This transition is driven by four critical global trends:
I. There is increasing attention on Scope 3 emissions within public procurement
and regulations like the EU’s CBAM.
II. There is an increasing demand for secondary aluminium as Original Equipment
Manufacturers strive for 40-80% recycled content by 2030.
III. Aluminium faces growing competition from other promising materials, such as
steel and plastics, which offer a lower carbon intensity, cost and better properties.
IV. High-quality recycled aluminium inputs are becoming more widespread from
the expansion of secondary processing capacity.
The primary aluminium sector focuses on aggressive decarbonisation strategies,
potentially for emissions less than 4 tCO₂/tonne via indirect emissions and a close
eye for emissions less than 0.5 tCO₂/tonne via advanced smelting technologies (IAI
2024). The combination of these measures displays a more extensive structural change
toward a low-carbon aluminium supply chain compatible with global climate objectives.
2.2 India Aluminium Outlook
The aluminium industry in India, over the next decade and in line with global trends, will
evolve with new requirements powered by increasing demand, shifts in composition,
and a stronger emphasis on decarbonisation will shape the aluminium industry in
India over the next decade. Yet, the pace of change, sectoral drivers, and production
structure in India have quite different characteristics compared to global dynamics.
2.2.1 India Demand Outlook
The growth of demand for aluminium in India is likely to outstrip the global
average by a long distance. Compared with the rest of the world, which will see
a rise in aluminium demand of about 1.5% per year, India’s demand will increase
by about 4.4% annually, rising from 4 MT in 2023 to 37 MT by 2070 as shown
in Figure 8. Driving this faster growth in India are the following factors: the
country’s rapid population increase; its large-scale urbanisation plans-in fact,
about 70% of India’s urban infrastructure that the country will need by 2047 is
yet to be built; and the expected increase in per capita aluminium consumption. Roadmap for
Aluminium Sector Decarbonisation 15
Figure 8: Production (Primary + Secondary) comparison of India with the world
Source: (NITI Aayog projections)
The applications related to energy transition, such as renewable sources pertaining
to photovoltaic systems and grid connectivity, and the transition toward EVs,
will require higher aluminium use intensity. India will lead the global demand
for aluminium, with its growth potentially influencing global supply chains and
decarbonisation strategies of the industry.
2.2.2 India Aluminium Supply Outlook
The aluminium supply in India will see rapid growth over the coming decades
to meet the growing demand. The majority of this growth will originate from an
increase in primary aluminium production, which is projected to rise from 4.1 MT
in 2023 to 18.6 MT by 2070, growing at an average annual rate of about 3.3%.
In India, together with the forecasted increase in primary aluminium production,
the contribution of secondary aluminium will also increase substantially over
time. From the current contribution of 18%, the secondary aluminium is likely
to contribute about 50% of India’s total aluminium supply by 2070, as depicted
by Figure 9. This trend indicates a greater emphasis on the circular economy
principles and energy efficiency, as the manufacture of aluminium from scrap
utilises significantly less electricity compared to its production from raw materials,
since power is required only for melting. Yet, primary production will continue
to be relevant and given that each tonne requires a huge quantity of electricity,
its estimation at 14 MWh/tonne, the overall energy demand of this industry will
keep increasing. As projected, addressing such demand may require about 40
GW installed power capacity up to 2070 in a business-as-usual scenario, and
this becomes another reason why switching to cleaner sources of energy is
crucial for sustainable growth. Roadmap for
Aluminium Sector Decarbonisation 16
Figure 9: Forecast primary and secondary aluminium supply share in India (in MT)
Source: (NITI Aayog projections)
2.3 Overview of Aluminium Sector Related Emissions in India
Along with this growth in domestic aluminium production, there is a corresponding
need to manage the sector’s growing carbon emissions. India’s aluminium industry-
from mining to smelting-is largely powered by captive coal-based electricity and
remains one of the most carbon-intensive in the world. This section presents an
overview of the existing emissions profile of primary aluminium production in India.
It highlights key sources of emissions along the value chain and points out stages
offering the largest opportunity for decarbonisation. Understanding the emissions
profile is essential for designing targeted interventions for a low-carbon transition.
The following are the sources of carbon emission from aluminium production:
•
The main direct process emissions include aluminium electrolysis, the combustion
of fuels used onsite - mainly for process heat in alumina refining - and the oxidation
of carbon anode. Indirect emissions from the consumption of electricity used
for smelting. Aluminium production also generates PFCs, a potent GHG, anode
effects occur i.e., the alumina ore content in the electrolytic cells falls below
critical levels. The quantity of PFCs they generate depends on the frequency
and duration of these occurrences (Gibbs 2000).
• The emission intensity in India is quite different for the primary and secondary
-recycled routes of aluminium production. The average Indian primary production
is roughly around 20-21 tCO
2
/t, as depicted by Figure 10, much above the average
global level of approximately 15 tCO₂/t. This is due to the high share of coal-based
electricity used in smelting, which represents over 75% of the total emissions in
Figure 11 at 14.8 tCO₂/t.
By contrast, secondary aluminium production from scrap is almost 95 per cent less
carbon-intensive, emitting only 0.4-0.6 tCO
2
/t. In FY 2022-23, India produced 4.1 MT
of primary aluminium, contributing 83 MTCO₂e emissions. In comparison, secondary Roadmap for
Aluminium Sector Decarbonisation 17
aluminium production was 1.7 MT (including non-regulated share), emitting much
smaller 0.8 MTCO
2
e. The numbers indicate a clear opportunity-increasing the share of
recycled aluminium in India’s supply mix can play a major role in reducing emissions
in the sector.
Figure 10: CO
2
e emissions intensity for Indian aluminium industry in 2023 (in tCO
2
e/t Al)
Source: (Ministry of Mines 2023)
Figure 11: CO
2
e emissions by unit process in each process step for Indian aluminium industry
in 2023.
*For FY 2022-23, Scope 1 + Scope 2 emissions from all processes from mining to casting. All major players in India are
integrated players from mining to casting with captive power production and own coal mines.
Source: (Vedanta 2024; HINDALCO 2023; NALCO 2023; Ministry of Mines 2023). Roadmap for
Aluminium Sector Decarbonisation 18
These findings highlight the urgent need to move towards renewable energy, enhance
energy efficiency, and introduce low-carbon technologies along the entire value chain
of aluminium in India. So far, this section has focused on emissions from primary
aluminium production, which remains a major source of carbon emissions in the Indian
aluminium industry. However, it is equally important to examine the potential for
secondary aluminium production. Due to its much lower emission intensity, secondary
aluminium production presents a sustainable low-carbon pathway towards catering
to future aluminium demand. The next section summarises key areas where further
decarbonisation of primary and secondary aluminium production can be pursued.
2.4 Primary aluminium potential areas for decarbonisation
Decarbonisation of the Indian aluminium industry is a complex process, with coal-based
production routes offering the greatest challenges and opportunities. The net-zero
pathway will require strategic technology deployment - both proven and emerging
- throughout the five identified stages in the production lifecycle: bauxite mining,
alumina refining, primary aluminium smelting, downstream casting - as provided
in Figure 12. Roadmap for
Aluminium Sector Decarbonisation 19
Source: (Vedanta 2024; NALCO 2023; HINDALCO 2023; Ministry of Mines 2023)
Figure 12: Process-wise potential areas for decarbonisation of Indian aluminium industry. Roadmap for
Aluminium Sector Decarbonisation 20
Each step in the process has a different potential for reduction of emissions. Based on
the analysis and expert interviews conducted for this study, the following abatement
potentials without novel technologies are identified for the Indian aluminium industry:
•
Bauxite mining: Minimal contribution by bauxite mining to total emissions (about
<1%). Decarbonisation at this stage lays the foundation for sustainable aluminium
production. Improvements at this stage should focus on energy use reductions
and the adoption of cleaner technologies. The efficiency gains in grinding and
crushing equipment also reduce energy consumption. Electrification of mining
machinery, i.e., drills and shovels, further reduces dependence on fossil fuels
while allowing avenues to RE integration. Transitioning to alternative fuels like
hydrogen and e-diesel also helps decrease emissions.
• Alumina refining: The abatement potential at this stage of alumina refining is
around 8% and depends on improvements in process efficiency and the integration
of clean energy sources. Among these, the shift from coal to natural gas during
calcination is one of the critical pathways since calcination with natural gas
greatly reduces the levels of emissions in industries while offering equivalent
effectiveness in operations. Other developing alternatives are fluidised bed
calcination and hydrogen-based alumina refining. Next comes RE integration,
particularly via Mechanical Vapor Recompression (MVR), and biomass-fueled
steam systems, which also can further improve sustainability. Nevertheless, these
require considerable investments and changes to infrastructure, hindering its
widespread adoption.
•
Aluminium smelting: Primary aluminium smelting is one of the carbon-intensive
stages of processing, with about 11% potential for abatement. The transition to
natural gas for anode baking is a reasonable near-term solution. Advanced analytics
can optimise potline performance, reduce waste, energy consumption, and costs
of non-conformities. Another possibly game-changing technology in the smelting
process is that of inert anodes, which would eliminate direct carbon emissions.
Powering anode baking, adopting high-temperature carbothermic reduction, and
implementing carbochlorination techniques with carbon regeneration represent
further advances. The challenge here is the high cost and complexity of integrating
into ongoing processes.
• Casting: Downstream casting has the abatement potential of about 5% and
could be optimised through energy management. For example, hot metal
transfer to alloying furnaces eliminates the need for reheat along the chain,
hence reducing energy consumption. Magnetic billet heating improves EE and has
lower associated emissions than conventional technologies. In addition, natural
gas as the main energy source in casting house operations presents additional
reduction opportunities in carbon intensity of the sector. While opportunities in
this area are limited, they become important for incremental progress in overall
decarbonisation.
•
Electricity consumption, therefore, is the dominant source of emissions, accounting
for about 76% of the abatement potential. Accordingly, decarbonisation of Roadmap for
Aluminium Sector Decarbonisation 21
electricity is vital. At the heart of this transition lie the RE sources, including solar
and wind. On-site RE generation by aluminium producers is a direct sustainable
supply option. Biomass co-firing in Captive Power Plant (CPPs) is an interim
solution for coal-fired-based power supply. New and emerging technologies
include Small Modular Reactors (SMRs) that can provide low-carbon, steady,
and reliable supplies of electricity. Finally, CCS technologies applied to power
generation further mitigate the emission issue as it captures and stores CO₂
effectively. Yet, this transition also raises challenges in terms of scalability, costs,
and the need for regulatory support to drive the transition on wide scales. Since
this aspect of aluminium production offers a huge potential for decarbonation,
the same is covered in detail under the study.
2.5 Secondary Aluminium Production as a Lever of Emissions Abatement
• This research focuses on the decarbonisation of primary aluminium, since it
represents the dominant source of emissions for the aluminium industry. At
the same time, however, scrap usage to produce secondary aluminium cannot
be disregarded, since this avoids the consumption of resources entailed in the
extraction of metallic aluminium from bauxite.
• Recycling of aluminium scrap is intrinsically much more sustainable compared
to primary production, using 95% less energy than the production of primary
aluminium (IAI). In India, the share of recycled aluminium is about 30% (18% from
the organised and 12% from the unorganised sector) (CRISIL 2022). India has
committed to net zero by 2070, which requires planning for resource efficiency
and a circular economy that encompasses the aluminium sector.
• The growth in China, India, and Japan is driving the Asia-Pacific region to have
the highest share of the global secondary aluminium market. A significant driver
is the automotive sector, seeing an increasing use of aluminium. According to
the Japan Aluminium Association, secondary aluminium production was 669.8
thousand metric tonnes in 2023, up from 664.8 thousand tonnes in 2022. The IAI
reports that North American production has a scrap content of 57%, the highest
recycling input rate anywhere in the world. Major players such as Novelis Inc.
and Alcoa invest heavily in the circularity of aluminium. Notably, Novelis has
announced a USD 2.5 billion new smelter and mill in Alabama, to produce 600
kilo tonnes annually, marking the first fully integrated aluminium mill in the US.
• Because demand for aluminium keeps growing, this low-emission production
route needs further cleaning to give a comprehensive decarbonisation strategy.
In this process, the emissions are very minimal because the scrap melts, mainly
during furnace operations, the energy applied in sorting and cleaning, and the
addition of additives such as fluxes that remove impurities and hence improve
metal recovery.
To translate these opportunities into tangible emission reductions, a combination
of technical, operational and energy-system interventions is as follows: Roadmap for
Aluminium Sector Decarbonisation 22
a. Energy Efficiency Improvements: The application of energy-efficient measures
such as regenerative burners, induction furnaces, and tilting rotary furnaces
could result in a considerable reduction in specific energy consumption.
These technologies allow waste heat recovery, effective use of fuel, and
better process control.
b.
Fuel Switching: Transitioning from conventional fossil fuels to cleaner fuels
such as natural gas, hydrogen, or RE-based electricity can provide substantial
emissions reductions. In particular, electric furnaces powered by RE will
eliminate direct emissions.
c.
RE Integration: Integration of RE for powering sorting, melting, and casting
operations increases the sustainability of the process. Solar power procurement
via open access or captive generation can be done, subject to scaling of
RE capacity.
d.
Improved Scrap Quality and Circularity: Improving segregation of scrap and
pre-processing treatment may lead to improved efficiency during melting.
While these measures offer significant emission reduction potential, their effectiveness
is contingent on addressing some bottlenecks that are:
(i) Lack of standardised channels to collect post-consumer scrap - especially from
the key sectors of end-of-life automobiles and consumer products. Most scrap
collection is through informal channels, and this results in inconsistent metal
quality with poor alloy segregation.
(ii) High levels of impurities in scrap metals due to mixing with plastics and other
alloys, i.e., iron, copper, zinc, etc. can cause deterioration in the properties of
the resulting aluminium, for instance, mechanical strength, corrosion resistance,
and castability of the molten aluminium.
(iii)
There is limited automation and digitisation in operations, which restricts efficiency
and productivity. This is common in small units and will limit the ability to meet
upcoming demands, both legally enforced and market based.
(iv)
Absence of a dedicated policy for processing scrap aluminium. There are guidelines,
such as the Non-Ferrous Metal Scrap recycling framework by the Ministry of
Mines. There is, however, no central policy guiding aluminium recycling, along the
lines of the Steel Scrap Recycling Policy, 2019, notified by the Ministry of Steel.
Addressing these challenges will be crucial to scale up clean secondary production
of aluminium. The following measures will drive circular economy in aluminium:
a.
A National aluminium recycling policy, which lays out the roadmap and targets
of circular metal usage. This can accelerate recycled metal usage.
b. Promote domestic scrap utilisation and expand the formal sector to improve
the quality and segregation of scrap. Roadmap for
Aluminium Sector Decarbonisation 23
c. Legally mandating EPR targeting aluminium-intensive sectors, i.e. automobiles,
appliances, etc.
d. Create a scrap exchange portal or empower a previously existing one for real-
time trading, leading to formalisation and efficiency.
e.
Mandate a quota for low-emission aluminium in public projects, which will boost
demand for recycled aluminium, alongside green primary production.
In summary, recycling aluminium scrap is a key strategy to decarbonise the emission-
intensive sector. By improving the supply of scrap metal, process improvements, proper
policies and investments, the sub-sector can become the route of choice to produce
net-zero aluminium in the near future. Roadmap for
Aluminium Sector Decarbonisation 24 Roadmap for
Aluminium Sector Decarbonisation 25
Chapter 3:
Key Levers for
Decarbonising India’s
Aluminium Sector Roadmap for
Aluminium Sector Decarbonisation 26
Chapter 3: Key levers for decarbonising
India’s aluminium sector
This chapter sets the stage for understanding where India’s aluminium sector currently
stands in its decarbonisation journey and the path ahead. In the following sections, we
explore key electricity and non-electricity measures across the aluminium value chain,
along with the associated challenges. In addition, this section also presents the progress
made under initiatives such as the Perform, Achieve, and Trade (PAT) scheme, pinpointing
the achievements and gaps. This chapter concludes by identifying prioritised high-impact
solutions that can accelerate the transition towards a low-emission sector.
3.1 Non-electricity Decarbonisation Measures
Figure 13: Marginal Abatement Cost Curve (MACC) of a coal-based aluminium plant (non -
electricity decarbonisation measures)
i MACC would need to be adapted to organisation-specific parameters & setup (e.g. gas-based power). Overlap
between levers has been removed e.g. natural gas use as a fuel & steam boiler electrification are mutually exclusive
levers in a refinery.
ii Abatement cost using amortised capex over 25 years.
Source: McKinsey’s analysis and CEEW 2024
Figure 13 shows the marginal abatement cost curve of a coal-based aluminium plant with
a focus on non-electricity emissions. This curve includes various stages of production
and different levers have been evaluated at each stage. It is estimated that 70 to 80%
of the non-electricity emission reduction can be achieved without any increase in
the cost. However, all the technologies must be implemented, both energy efficiency
(with low or negative abatement costs) and those with positive abatement costs such
as fuel switching, highlighting the importance of integrating both the technologies.
Therefore, a combination of improvement in operations, innovation in technology,
and careful selection of energy costs is required for deep decarbonisation. Roadmap for
Aluminium Sector Decarbonisation 27
Key insights
• There is a substantial potential for EE improvement in refining and smelting
processes. Measures in refining, digestion and calcination show negative abatement
costs, i.e., these interventions save cost while simultaneously reducing emissions.
For instance, EE in refining digestion has the highest negative abatement cost,
around -60 USD/tCO₂, illustrating that not only do these steps reduce emissions,
but they also save operational costs. Similarly, EE in refining calcination and the
coating of anodes provide significant emissions reductions at no additional cost,
contributing to early-stage abatement.
• Levers such as optimisation of anode design, biomass-fuelled steam boilers,
and waste-heat cogeneration show positive abatement costs ranging between
0 to 20 USD/tCO
2
. This indicates that while these measures require investment,
the overall costs remain manageable for the sector.
• Fuel switching (coal to natural gas) has a high positive abatement cost of
around 30 USD/tCO
2
, indicating that it is not only capital intensive but also
higher operational costs. The delivered cost of natural gas is 11.3 USD/GJ due
to import and distribution costs. On the other hand, biomass has a landed cost
of 4.7 USD/GJ making it a cheaper alternative, and coal is even further cheaper.
Different measures provided in the MACC have been segregated according to the
process and have been detailed in the following subsections.
3.1.1 Refinery Decarbonisation Levers
The major levers in refinery decarbonisation are energy efficiency, fuel switching to
clean fuels, and tube digesters. These levers have their own unique implementation
challenges and opportunities. For example, compared to fossil fuels used in
aluminium refineries such as coal and oil, natural gas has lower specific emissions
(EIA 2024). Burning natural gas produces approximately 50 to 60% less CO₂
per unit of energy compared to coal and 25% compared to oil (EIA 2022).
However, the cost of natural gas is higher than the fuel currently used.
Moving from oil-fired boilers to gas-powered steam generators is a high TRL
lever that reduces emission in the low to moderate range. Similarly, in relation
to rotary kilns, Circulating Fluidised Beds also represent an energy-efficient
alternative, with better heat recovery capabilities. Indeed, fluidised bed systems
can realise up to 50% higher energy savings when integrated waste heat
recovery is applied; they can also allow for considerable NOx and CO
2
reductions
depending on the process and type of material treated. According to (DoE US
2017). These technologies present one of the many immediate opportunities
for emission reductions because of their relatively simple implementation and
established maturity.
On the other hand, innovations such as tube digestion, CHP, and waste-heat
cogeneration are even more advanced but with a more complex solution. Tube Roadmap for
Aluminium Sector Decarbonisation 28
digestion, for example, allows operations below 10 GJ per tonne of energy input,
but its implementation is challenging as this requires substantial redesign and
has space considerations, especially for existing plants (EMEP 2023). Meanwhile,
CHP systems, which co-generate heat and power, present a well-established
method of integrating EE with emissions reduction, though they demand a high
level of coordination and complexity in operation.
Figure 14: Levers for refinery decarbonisation
Source: Expert interviews with (HINDALCO, NALCO, and VEDANTA 2024)
Biomass-based steam boilers also offer a transition route from coal. This will not
only cut CO
2
emissions but also lead to negative CO
2
emissions if implemented
together with CCS technology. The emission reduction will be moderate to
high, with some implementation challenges, according to (Liu 2023). Finally,
efforts toward enhancing EE, even though they are incremental in benefit,
would contribute to reducing both thermal and electrical energy consumption.
Together, these levers represent a balanced approach to decarbonising refineries,
with a mix of mature, easily deployable technologies and more innovative high-
impact solutions critical for long-term sustainability in the aluminium sector. Roadmap for
Aluminium Sector Decarbonisation 29
3.1.2 Smelter Decarbonisation Levers
Like refinery decarbonisation, in smelter decarbonisation also, increasing EE
and improving cell design are major levers. For instance, the cathode lower
components comprise a rectangular steel box reinforced on the inside with carbon,
refractory bricks, and insulating materials. With aluminium plants continuing to
ramp up potline amperage to increase production, there is a need to hasten the
rate of heat transfer from the sidewalls of the cathode to maintain the frozen
cryolite ledge to protect the sidewall lining material. Key measures include
high thermal conductivity silicon carbide sidewall blocks, steel fins, and air
cooling to maintain the cryolite ledge and protect cathode linings with rising
potline(Tabereaux and Peterson 2014).
Advanced materials like copper clads, aluminium/steel welds, and graphitised
cathodes reduce electrical resistivity and energy use while improving pot life
(Rivoaland 2016). Although the technologies are mature, they are moderately
difficult to implement as well as offer a low-to-moderate emissions reduction impact.
Another key lever is optimised anode design. With sloped and perforated anodes,
smelters can facilitate improved gas circulation through the molten cryolite
bath to enhance throughput and further reduce energy consumption. Like other
levers, this is mature, providing important energy and emission benefits but with
medium difficulty in implementation. Smart pot controllers are technologically
advanced solutions that employ predictive analytics in optimising energy use
and anode effects. But they are considered a bit challenging to deploy. These,
along with energy buffering systems, help in managing fluctuations in power.
Figure 15: Levers for smelter decarbonisation
Source: Expert interviews with (HINDALCO et al., “Expert from Indian Industries,” 2024) Roadmap for
Aluminium Sector Decarbonisation 30
Adopting the technologies listed above will enable intermittent RE to be used
exclusively for aluminium smelting and accelerate progress toward sustainable
practices. This will involve significant investments and changes in production sites
over the coming twenty years. EE measures-both operational and technology-
related-continue to provide the backbone for decarbonisation for now, offering
moderate but urgent overall cuts in energy use by smelters. These levers together
represent a holistic approach toward low-carbon aluminium smelting, balancing
technology maturity and significant emissions reduction.
3.1.3 Other Novel Technologies for Decarbonisation
This section analytically looks at “moonshot” technologies-advanced, high-impact
innovations with potential to reduce CO₂ emissions in aluminium smelting and
alumina refining to near-zero levels. Many technologies listed here focus on areas
where conventional processes are carbon-intensive and propose transformative
changes rather than incremental improvements. Each option varies significantly
in technical maturity, investment type, and operational impact, reflecting the
complex challenges and trade-offs involved in achieving deep decarbonisation.
Selected technologies have been represented in Figure 16, that could lead to
a breakthrough in the reduction of emissions from alumina refining as well as
aluminium smelting processes. Figure 17 provides the Capex expected for the
adoption of these technologies, which is based on McKinsey’s modelling on
internal aluminium supply projections and expert interviews. Roadmap for
Aluminium Sector Decarbonisation 31
i. Across Scope 1 and 2.
ii. Retrofit on existing assets except for carbo-chlorination, which is a Greenfield smelter investment.
iii. Change in Opex (Opex delta) compared to conventional Bayer process in case of alumina refining and conventional HH in case of aluminium smelting; Net
lower cost for Inert anode as higher electricity consumption is more than offset by lower anode spend.
iv. Based on USD to INR conversion of 83.5.
vi. TRL for aluminium industry.
vii. Negligible at current NG prices of ~11.3 USD/GJ.
Source: (Mission Possible Partnership 2021; HINDALCO, NALCO, and VEDANTA 2024; McKinsey 2024)
Figure 16: Non-electricity moonshot technologies for mid-to-long-term decarbonisation. Roadmap for
Aluminium Sector Decarbonisation 32
MVR with hydrogen and hydrogen calciner represent breakthrough approaches
in alumina refining. Both technologies aim to electrify or shift to GH2 for steam
and heat generation, traditionally achieved through fossil fuel combustion.
These technologies, by leveraging GH2, address the high carbon emissions
from heating and calcination processes. They even show a close-to-negligible
emission footprint of less than 0.1 t/Al, thus proving that carbon-free heating is
possible. However, they are still at pilot-stage technology readiness level at TRL
5, with limited industrial deployment and applications. This indicates that it still
needs industry-wide validation since scaling hydrogen-based solutions require
massive infrastructure and energy input, with very important questions about
the availability of GH2 and also the economic viability for wide-scale adoption
in India. Current development is being supported by Alcoa/Rio Tinto, EN+, etc.
According to Figure 17, refining with hydrogen-based boilers and calcination-
an ultra-low CO₂ technology-entails Capex of around USD 350 per tonne of
aluminium, more than twice the Capex of conventional NG-based digestion
and calcination at USD 160 per tonne. This two-fold increase reflects the high
infrastructure costs associated with integrating hydrogen into the refining
process. Despite this increase, refining remains relatively less capital-intensive
compared to smelting.
Figure 17: Greenfield capex in EU and North America of refining & smelting, USD/t Al
Source: McKinsey modelling based on internal aluminium supply projections, (HINDALCO et al., “Expert from Indian
Industries,” 2024).
In the aluminium smelting, Hall-Héroult with CCS is a retrofit option that captures
carbon emissions from existing smelting processes for transport and storage Roadmap for
Aluminium Sector Decarbonisation 33
elsewhere. Retrofitting CCS onto existing infrastructure may present a functional
near-term emissions reduction path (this at a 6% operational expense increase).
Its moderate maturity (TRL 3-4) would show that carbon capture in smelting
is feasible but could be expensive and operationally complex, since it needs
infrastructure for storage, besides regulatory frameworks for safe and long-
term sequestration.
These developments have been adopted by a few of the global aluminium
suppliers, including Hydro, Alvance, and Rio Tinto. In contrast, Carbo-chlorination
and Inert anode technologies represent more transformative approaches. Carbo-
chlorination aims to completely eliminate the CO₂-forming reaction by producing
aluminium chloride for electrolysis, resulting in dramatically fewer emissions
(<0.1 t/Al) and a potential 20% reduction in operating costs. However, this
is greenfield technology (TRL 4), entirely new facilities, which needs capital
investment and technical adaptation. It fits the long-term decarbonisation target
but with considerable risk and resource need. Meanwhile, Inert anode technology
replaces carbon-based anodes with inert materials at the source of CO₂ formation
consequently yielding oxygen in its place. With a TRL of 7, it is one of the most
mature options, already being implemented by major industry players such as
Alcoa and Rio Tinto under the Elysis initiative. It balances feasibility and impact
well, offering significant reductions in emissions with just a moderate increase
in operational costs, hence one of the more immediately scalable solutions.
For smelting, the capital cost of deploying Hall-Héroult with CCS or inert anode
technology is similar, which underlines that each of these ultra-low carbon
emissions technologies requires a serious upgrade of the existing smelting
infrastructure. Inert anode retrofits may be challenge since the costs are
comparatively very high. In many instances, such retrofits will be economical
only when the existing equipment is near the end of its operational life. The
retrofit makes commercial sense in those cases; otherwise, it becomes impossible
because the widespread changes that would be required for pot rooms and other
essential elements make the retrofitting impractical. This chart also illustrates
the relative increase in investment associated with transitioning from traditional
HH technology to low-carbon alternatives in smelting. Both HH + CCS and
inert anode installation cost about 20% more. This is important considering
the investment in an industrial-scale smelting operation. This suggests that the
actual feasibility of inert anode technology, being retrofittable or not, depends
on how much longer the existing equipment can effectively be used.
Substantial investments and collaboration across industries by technology
suppliers and users are required for these technologies to move from pilot
projects to commercial deployment. In India, these options are viable to a great
extent based on the availability of GH2, regulatory support for CCS, and capital
for mature technologies like inert anodes. These futuristic technologies indicate
that long-term planning and innovation are necessary to achieve decarbonisation
goals in the aluminium sector. Roadmap for
Aluminium Sector Decarbonisation 34
3.2 Electricity Decarbonisation Measures
Manufacturing of aluminium is an electricity-intensive industry. This is manifested
in the cost structure, which is majorly utilised for paying electricity bills. Figure 18
depicts that power alone constitutes about 41% of the total cost structure in India’s
aluminium industry, which is higher than all other inputs, including the raw material
input (alumina), which contributes about 33%. For smelters like Vedanta Korba, at
one plant producing 0.58 MT per year, approximately 14000 kWh of electricity is
consumed to produce one tonne of aluminium
1
, which implies huge energy requirements
of 1,740 MW to achieve full utilisation. Besides, the dependence on CPPs, which are
largely coal-based, increases carbon emissions from the sector. Presently, 9.4 GW
of CPP capacity is operational for about 4.1 MT of installed aluminium capacity in
India (Industrial Punch 2021), thereby leading to both surging emissions and a surge
in operational risk, since smelter cells degrade at a very rapid rate if power supply
is disrupted for even short durations (ICPA 2021). These elements make power
decarbonisation in aluminium a complex yet important challenge, particularly amid
a growing need by the industry to contribute to global carbon reduction targets.
Figure 18: Typical aluminium production cost breakup, India, percent
Source: Industry provided data.
To further understand how changing the source of electricity in smelting is the
primary lever to decarbonise primary aluminium production, Figure 19 illustrates the
emissions intensity of primary aluminium production across different energy sources.
Hydro-based production emits the least, at approximately 4 to 5 tCO₂/t because of
the use of renewable hydropower, which avoids fossil fuel emissions (Norsk Hydro
1 95% used for smelter operation and 5% used during alumina refining Roadmap for
Aluminium Sector Decarbonisation 35
ASA).
2
In contrast, natural gas-based production has higher emissions at around 8
to 10 tCO₂/t, as the combustion of natural gas, though much cleaner than coal, still
emits considerable GHGs. Globally, the average intensity of aluminium production is
around 15 tCO₂/t, reflecting the wide difference in energy mixes in different regions.
However, coal-based production in India is very high, with emissions ranging from
18 to 24 tCO₂/t.
3
Figure 19: Primary aluminium production emissions based on energy source
*Scope 1 + Scope 2 emissions from all processes from mining to casting. All major players in India are integrated
players from mining to casting with captive power production and own coal mines.
# Industry average of 19.2 tCO
2
/tonne
Source: (EU Commission 2019)
The selection of electricity sources represents the most important factor determining
carbon intensity in primary aluminium production. Figure 20 gives an overview of
the energy mix in global aluminium production, to which India is an outlier due to
its extremely high dependence on coal.
Coal makes up a full 99% of India’s energy mix for producing aluminium, far above
the global average of 56%. The near-total dependence on coal as the primary source
of energy for aluminium smelting raises the carbon footprint of the Indian aluminium
industry. In contrast, countries like South America and the CIS, where hydro sources
provide 81% and 94%, respectively, of power, illustrate the potential of cleaner sources
of electricity to bring down the carbon footprint of production substantially.
2 Smelters in regions with 100% hydropower have emissions intensity less than 4-5 CO
2
e t/t
(Scope 1 and Scope 2).
3 For coal-based smelters, electricity emissions factor is ~ 1 kgCO
2
/kWh for CPP, 0.7 kgCO
2
/kWh from grid.
*
# Roadmap for
Aluminium Sector Decarbonisation 36
Figure 20: Global usage share by power type in aluminium production
#Industry average of 19.2 tCO
2
/tonne
Source: (EU 2020)
The analysis makes it clear that shifting the energy source in smelting processes offers
the most immediate and significant lever for the decarbonisation of India’s primary
aluminium production. Regions like Europe and North America, with a diversified
energy mix including hydro, nuclear and renewable energy, present viable pathways
for reducing coal dependence while ensuring stable energy supplies. In this regard,
addressing India’s strong coal dominance through greater RE adoption and exploring
the role of energy-efficient technologies in smelting is critical to emissions reduction
and aligning the sector with national and global decarbonisation goals.
3.2.1 Role of Clean Energy in Smelting
Figure 21 gives a preliminary, non-exhaustive analysis of potential sources of
electricity for decarbonisation of smelter operations in India. The viability of
each energy source is assessed based on capacity, expected generation, and
applicability to meet the high base load demand required for smelting processes.
The options are categorised by their commercial readiness: Commercialised
(C), Pilots (P), and Demonstration (D) stages. Roadmap for
Aluminium Sector Decarbonisation 37
Figure 21: Smelter electricity decarbonisation potential archetypes
US department of energy, Solar Energy Industry Associations
BECCUS: Bioenergy Carbon Capture Storage, CCGT: Combined Cycle Gas Turbine, CSP: Concentrated Solar Power, PV: Photo-Voltaic, SMR:
Small Modular Reactor, CCUS: Carbon Capture Utilisation and Storage, RES: Renewable Energy Sources.
*Not many examples present in India as of now, hence potential typical data used.
Source: (EIA 2022; Mignacca and Locatelli 2019; Donnison 2020; The Goldman Sachs Group, Inc. 2020; Wind Europe 2021) Roadmap for
Aluminium Sector Decarbonisation 38
The following observations have been derived from information in Figure 21:
•
Hydropower is a commercially proven solution, delivering firm power when
integrated with the grid. Despite its scalability, hydropower is geographically
constrained by the availability of suitable water bodies. It remains a highly
applicable option for smelters due to its capability to meet 100% of the
load. In many instances, it is very applicable for smelters since it can meet
100% of the load. However, seasonal variability and long project lead times
may mitigate against the application of hydropower. PPAs can offer price
stability over the long term and procurement certainty but cannot resolve
issues of low generation due to seasonality.
•
SMRs are a promising pilot-stage technology. With a capacity factor of 90%,
they meet all the energy requirements for smelters when functional. These
reactors can be scaled up, are much safer than traditional nuclear technologies,
and are suitable for decentralised applications. However, operational pilots
are lacking in India at present, and deployment will require support from the
policy level, followed by necessary regulatory approvals and integration with
PPAs or grids to ensure reliability during their downtime. Based on studies,
conventional nuclear power is a mature option and thus highly applicable to
smelters. Its high-capacity factor is suited to address energy requirements
uninterruptedly. As the capital cost is high, PPAs with nuclear plants would
take care of the economics. Along with this, integration with the grid will
help in peak load management. The major challenges are long construction
periods, high capital costs, and public safety concerns.
• Coal + CCUS offers a route for coal-based power to be decarbonised.
Pilots are running worldwide, but there is a lack of demonstrated projects
in India. At a 70% capacity factor, coal with CCUS can be relied upon to
meet smelter loads, where there is the need for investment into capture
technologies and storage infrastructure. PPAs may economically stabilise
the operations, while integration into the grid provides for conformance with
emissions standards through offset mechanisms. NG + CCUS, though in their
demonstration phase, also offer a plausible transition pathway based on the
leveraging of existing NG infrastructure. Operating at an 80% capacity factor,
they will be able to meet smelter demand with a considerable lowering in
emissions. But scalability, infrastructure requirements, and carbon capture
cost continue to be challenging for CCUS. Supply risks could be handled
through PPAs with gas suppliers, while grid integration ensures backup in
case of any operational hiccup.
•
Bio Energy with CCUS (BE-CCUS) makes use of renewable biomass energy
in concert with CCUS. While maintaining the potential for carbon negativity,
limited biomass availability and the maturity of CCUS technologies hinder
its applicability. Smelters may use PPAs with biomass suppliers for their
needs or grid-based energy as supplementary sources during shortages. Roadmap for
Aluminium Sector Decarbonisation 39
• Among the renewables, onshore and offshore wind and PV are known
to be intermittent; hence, they cannot act as an exclusive feeding source
for smelting. They would need a grid or extra storage/backup to ensure
reliability of supply. CSPs, because of their inherent storage potential, are
better placed to serve the smelters, but their costs and applicability in India
are not very encouraging due to low smelter load compared to PV systems.
• RE-RTC solutions integrated with backup solutions, such as PHS and BESS,
ensure a continuous supply of power. These can reach capacity factors of
85-100%. These combinations may thus theoretically fulfil the requirements for
continuous smelter operations. These technologies still face some challenges,
though: limited scale availability and high costs compared to captive power
production (CEA 2024). Battery storage provides a certain amount of flexibility
but has deep implications for cost due to the battery replacement cycle and
other parameters. For instance, developers will need to build more than the
stated capacity to achieve the monthly Capacity Utilisation Factor (CUF)
of 70% and annual CUF of 80% of RTC projects. Optimal costs and reliable
electricity could be possible through grid integration and PPAs. Table 1, gives
the comparative picture of these two storage options on different criteria:
Table 1: Comparative analysis - Pumped Hydro Storage (PHS) vs Battery Energy Storage
System (BESS)
CriteriaPHSBESS
Hard Cost
INR 7.8 Crore/MW (two reservoirs),
INR 6.1 Crore/MW (one reservoir)
INR 2.90 Crore/MWh (including
GST)
Life
35-40 years; additional 35-40 years
after modernisation
8-10 years (battery replacement
cycle-dependent)
Yield75%-80%
68% (Vanadium Redox Flow), 79%
(Lead-acid), >85% (Li-ion)
Levelised Cost of
Storage
Lower than BESSHigher than PHS
Gestation Period 60-84 months (site-dependent) Less than 24 months
O&M CostHigherLower
Auxiliary Power
Consumption
LowerHigher
Disposal Concern NoneHigh (battery disposal challenges)
Environmental Impact LowHigh
Reliance on Import No
Yes (grid-scale systems need
imports)
Source: (World Energy Council India 2022)
This analysis shows that while renewable sources alone are not yet capable
of providing consistent, high-load power for smelting, integrating them with
storage or fossil-based solutions is a promising pathway for decarbonising Roadmap for
Aluminium Sector Decarbonisation 40
electricity in the aluminium sector. The selection of a power source will be
based on availability, cost, and technological readiness; therefore, a mix of
advanced renewables combined with backup systems emerges as the most
viable pathway for smelter decarbonisation.
3.2.2 Challenges in Power Decarbonisation for Smelting
Several challenges constrain the process of aluminium smelting, mainly due
to its very high energy requirements and the need for constant, uninterrupted
power. Adding renewable sources of energy can further create issues with
intermittent power and stability of operation. Key challenges in decarbonising
the electrical power sources for aluminium smelting pinpoint specific technical
and operational barriers that must be overcome.
Power fluctuations: A given challenge in aluminium production, where the
smelting pots need very high temperatures, at about 950°C, maintained with
a stable DC current of 0.35 milliamps and voltage of 4.2 to 4.5V. Even slight
power fluctuations disturb the alumina solubility, decreasing the volume of
production and purity of aluminium, which varies between 99.5 and 99.8 per
cent. Impurities such as iron reduce conductivity, tensile strength, and ductility.
Other than that, fluctuations in power change the density of the molten metal,
increase explosion risks, and cause thermal shocks that can lead to early failures
of the pots and hazardous waste. Also, unstable power causes interference in
thermal cycles, enhances power consumption, emissions, and loss in production,
which, in turn, affects efficiency and quality.
Power Outage: Aluminium smelters rely on a constant and reliable supply of
power, since even very short network outages lead to significant operational
and economic implications. The Composite Islanding and Load Management
System (CILMS) supports power fluctuation management; however, the variability
in renewable energy supplies can lead to load shedding. Outages of less than
30 minutes reduce production efficiency from 94% to 90%. Outages longer
than 60 minutes lower the temperature below 940° C, leading to partial pot
stoppages and quality degradation. If the power outage persists for more than
90 minutes, then the efficiency could collapse to 50% due to partial solidification
of the metal. Prolonged outages of 120 to 240 minutes totally solidify the
pots and take 15 days for its restart with devastating impacts on production.
It also generates hazardous wastes. Figure 22 presents critical risk in power
failure on aluminium smelters’ operations: fast temperature loss within the
smelter cells. As soon as a power failure occurs, the temperature of aluminium
inside the cells drops sharply. From the graph, it is observed that within five
hours of shutdown, the temperature of aluminium has dropped dramatically,
close to the freezing point of 660° C. Within 5 hours of power failure, the
commencement of solidification of the electrolyte occurs, making operational
issues very severe with a possibility of permanent damage to the pots. After 24
hours, the anodes must be removed, further complicating the restart process
with possible impacts on cell life. The electrochemical reaction caused by these Roadmap for
Aluminium Sector Decarbonisation 41
unforeseen shutdowns leads to irreversible damage to the pots and reduced
lifetime. The quick restoration of power is crucial to maintaining the productivity
and lifetime of operation in smelters.
Figure 22: Graph showing aluminium temperature profile after shutdown in a cell.
Source: (Øye 2011)
Intermittency of RE: The intermittency of RE creates some problems in producing
aluminium, as it requires a continuous supply of power. The schedules of RE
change during the day due to which backup from CPPs is necessary. CPPs have
to modify their PLF according to the availability schedules of RE. Variations
in PLF are difficult technically because of ramp–up and ramp–down limits,
frequent changes, and delays in restarting coal mills. Partial loading increases
costs and reduces efficiency and plant life. Moreover, partial loading enhances
environmental and safety hazards like increase in emission and boiler explosions.
Stable power alone can ensure efficient smelting. Therefore, partial load operation
of CPPs is not feasible.
3.3 Progress in Decarbonisation of the Indian Aluminium Industry
This section shows how the industry has been proactive in terms of emission reductions.
From 2019-2020 to 2022-2023, each of the key players showed significant progress
in terms of reduction in emissions intensity. This will develop further as Vedanta and
Hindalco are leading from the front with declarations of commitments to achieve
net-zero by 2050. These kinds of initiatives are crucial to make the aluminium sector,
while reducing its own environmental footprint, contribute to India’s journey toward
a sustainable and low-carbon future. Roadmap for
Aluminium Sector Decarbonisation 42
Figure 23: Indian aluminium industries’ progress in emissions intensity.
Source: (HINDALCO 2023; NALCO 2023; Vedanta 2024)
3.3.1 Role of the Perform, Achieve, and Trade (PAT) Scheme
It is very well reflected from the various PAT cycles’ data that the PAT scheme
has driven notable improvement in EE within the Indian aluminium industry.
Major players that have been tracked across the various cycles include Hindalco,
Vedanta Jharsuguda Plant-1 and Plant-2, and NALCO, among others, with
significant energy reductions observed over time. Roadmap for
Aluminium Sector Decarbonisation 43
Source: (BEE 2023, Company reported data.)
Figure 24: Energy Efficiency gains achieved by industry through PAT cycles. Roadmap for
Aluminium Sector Decarbonisation 44
• For Hindalco’s 1.3 MTPA plant, the PAT cycles have demonstrated steady
energy savings. Starting from a baseline of 30.83 Mtoe in Cycle-I (2007-10),
the target was set at 29.08 Mtoe for the plant, with an actual achievement
of 28.66 Mtoe in the year 2014-15. This progress continues in Cycle II, where
Baseline rose to 43.85 Mtoe, with a target of 41.78 Mtoe, and an achieved
value of 39.96 Mtoe by2018. Currently, the plant participates in the ongoing
Cycle VII (2018-25) with a targeted decreased to 45.30 Mtoe.
• Vedanta’s Jharsuguda Plant-1 (0.5 MTPA) has shown improvement in EE
from Cycle I through Cycle VII. During Cycle I, the baseline of 6.40 Mtoe/t
was set, with a target of 6.02 toe/t, and an achievement of 5.22 toe/t by
2014- 15. In Cycle II (2014-18), the plant did better than its target of 3.90 toe/t,
achieving 3.76 toe/t. The plant has further targeted a reduction in energy
intensity to 3.50 toe/t from a baseline of 3.75 toe/t in the ongoing Cycle
VII. Vedanta’s Jharsuguda Plant-2, with 1.3 MTPA capacity, participated in
Cycle V during 2015-22, during which its energy intensity was reduced from
a baseline of 3.52 toe/t to an achieved level of 3.27 toe/t, against a target
of 3.31 toe/t.
•
NALCO has a smaller capacity of 0.48 MTPA, which again showed improvement
through PAT Cycle-VII across two complexes: the mines and refinery complex,
and the smelter and power complex. The mines and refinery complex set
a baseline of 0.31 toe/t, aiming for 0.29 toe/t, while the smelter and power
complex aimed to reduce from 4.22 toe/t to 4.02 toe/t.
•
Overall, these PAT cycles indicate an organised approach by the aluminium
industry toward achieving measurable energy reductions. While aluminium
manufacturing is a highly energy-intensive industry, such focused reductions
demonstrate the commitment of the sector toward improving EE and reducing
carbon footprint over time.
3.3.2 Other Steps Being Taken by the Industry Towards Decarbonisation
The Indian aluminium industry has undertaken various initiatives aimed at
achieving decarbonisation
4
.
• Hindalco has introduced Copper-Insert Collector Bar (CuCB) technology,
improved cell lining, and enhanced current magnetic compensation for better
EE. It is also using predictive analytics for pot control and increasing anode
length for reduced energy consumption.
• Hindalco’s Belagavi refinery uses a biomass boiler to supply a third of its
steam and power, along with improvements in liquor productivity, steam
economy, and statistical modelling to reduce evaporator steam consumption.
It also employs Computational Fluid Dynamics (CFD) modelling to reduce
4 Source: Indian aluminium industry reported data. Roadmap for
Aluminium Sector Decarbonisation 45
calciner oil consumption and solar power with battery storage at Bagru
and GP Mines.
•
Hindalco has co-fired 100,000 tonnes of biomass in FY23- 24. and has reduced
auxiliary power consumption. It has an installed renewable capacity of 173
MW and aims for 200 MW by FY25, with a target of adding storage by FY27.
• Hindalco is also developing a renewable hybrid system with storage for
RTC power, planning 100 MW by FY26 and 100 MW by FY27.
• Vedanta has fully graphitised cathodes, developed a smart pot controller,
and optimised carbon anode consumption to reduce emissions. It is also
upgrading anode lining and reducing auxiliary power use.
• Vedanta focuses on onsite captive solar installations and circulating fluid
bed technology in calciners.
•
Vedanta is upgrading air preheaters and economisers, implementing biomass
co-firing, and targeting 30% RE consumption by 2030, with over 1330 MW
in PPAs signed for RE.
•
NALCO is shifting to 40% non-fossil power by 2030, improving anode baking
efficiency, and enhancing pot graphitisation for lower voltage operation.
It is also adopting energy-efficient compressors and high-efficiency dryers
to optimise power use.
• NALCO has adopted Heavy Fuel Oil additives in calciners to reduce
consumption, modified green liquor headers to save coal, and optimised
power savings with auto start/stop control logic for turbid pumps.
Additionally, Electrostatic Precipitators (ESPs) are used in charge ratio
mode for improved boiler efficiency.
• NALCO has modernised air preheaters, optimised condensate extraction
pumps, and replaced high-pressure heaters to improve efficiency and reduce
coal consumption.
3.4 Identification of Prioritised Solutions
3.4.1 Initial Sub-categorisation
A systematic evaluation process was undertaken to identify high-impact solutions
for decarbonisation within the aluminium sector. This was done through secondary
research, consultation with the stakeholders and working group members, and
expert interviews with representatives from the industries and the government.
Out of the 30 decarbonisation initiatives identified for the aluminium industry
(see Annexure 2 for a complete list), a structured filtering approach was applied
to prioritise actionable solutions, and have hence been summarised into eight Roadmap for
Aluminium Sector Decarbonisation 46
subcategories, with each of the subcategories promising a significant reduction
in emissions:
• Subcategory 1: Exclusive Green Power Grid for Aluminium Production-
Create green power corridors or captive renewable grids that only aluminium
smelters and refineries can use. This will provide low-carbon power around
the clock that is separate from the coal-dominated state grid and will lead
to significant, verifiable reductions in emissions.
•
Subcategory 2: Offer technical and regulatory support to the existing CPPs
for RE-RTC to guarantee integrity in operations- A 15–20% reduction in
emissions/tonnes of aluminium is possible with 30% RE blending, while with
70% RE blending, a 45-60% reduction is realised. The time for impact on
this is estimated at 3-7 years and will involve the development of feasibility
studies and industry-DISCOM-CEA collaborations in depth. This requires
proactive state DISCOMs and CEA support to further decarbonisation through
hybrid RE and coal power operations.
•
Subcategory 3: Biomass Co-firing Mandates in CPPs- A 5% biomass cofiring
mandate in CPPs can reduce the cost of aluminium production by 2-3% per
tonne within three years, subject to the availability and suitability of biomass.
There is no need for funding from the government, but a regulatory review
must be conducted in order to assure biomass supply and stable pricing
considering growing industrial demand.
• Subcategory 4: Provide Nuclear Power for Existing and New Smelting
Capacity- Nuclear power will potentially decrease the number of emissions
from aluminium smelting by 70-75% per tonne. However, the infrastructure
and policy development necessary will take longer than ten years. No direct
funding from the government is required, but planning is essential for aligning
this ‘power supply’ with the needs of industry, as well as establishing a
structure that serves to efficiently direct nuclear energy to smelting
• Subcategory 5: Allocate Hydro Power for Current and New Smelting
Capacity- Smelting using only hydro-electric power can achieve a decrease
in emissions of 70-75% per tonne of aluminium; the achievement will take
three to seven years since it depends on long–term planning. Government
financial support is not called for, but challenges that may arise include
limited hydro capacity and need for prioritising industrial use over PHS.
• Subcategory 6: Economic Incentivisation for Biomass/ Municipal Solid
Waste (MSW) Use for Steam and LNG use in calciners- A 2–3% reduction
in emissions per tonne of aluminium may be achieved by using biomass/
MSW for steam and LNG use in calciners. This could be achieved in three
years or less, depending on biomass and natural gas supply. There is a need
for financial incentive to economically compensate for the high Capex and
Opex costs, estimated at about USD 50-60 per tonne of CO
2
reduced. Pilot Roadmap for
Aluminium Sector Decarbonisation 47
demonstration for technology assessment and Capex support for firms
using biomass and MSW as fuel are required.
•
Subcategory 7: Mandate Incremental Adoption of EE Measures in Smelters
and Refineries- 5-10% reduction per tonne of aluminium can be achieved
within three years with no government funding. The BEE can lead this
initiative using the Carbon Credit Trading Scheme (CCTS).
• Subcategory 8: Enable Local Commercialisation of Key Moonshot
Technologies for Decarbonisation- Emission reductions of 2-4% can be
achieved using technologies like inert anodes, CCU, MVR, GH2 calciners,
and carbochlorination. Transitioning from coal-based CPPs to SMR could
reduce emissions by up to 75%. These benefits are anticipated in 7 to 10
years, government financial support is crucial for research, pilot projects, and
scaling due to high initial costs. Challenges include the need for advanced
technology maturity and the absence of established market frameworks
for new decarbonisation methods.
• Subcategory 9: Provide Economic Viability Support for RE-RTC Power
Adoption via Third-party Open-access Route: Integration of RE into
aluminium production can lead to significant reductions in emissions, with
a 15-20% decrease per tonne of aluminium achievable through a 30% blend
of RE, and a 45-60% reduction possible with a 70% blend. However, the
realisation of these benefits will take approximately three to seven years,
due to the development and commissioning of RE projects. To make this
transition, the incentives and tariff reductions by the government are a
must to support it, and their estimated costs will range from INR 2-4 per
kWh of blended RE power based on a consumption of 14,000 kWh per
tonne of aluminium. Successful implementation requires the creation of a
funding corpus and strong coordination with the MoP and state DISCOMs
companies for facilitating third-party access.
3.4.2 Priorities for Achieving Emission Reduction
The subcategories of solutions mentioned in the section above can be prioritised
for the decarbonisation of the Indian aluminium industry. However, considering
immediate deliverables on the emissions reductions targets by 2030 that
India has set, the study has finalised five priorities solutions that have been
aggregated across short-term, medium-term and long-term depending on their
applicability. Figure 25 depicts a phased approach to decarbonise electricity
usage in aluminium smelters: Roadmap for
Aluminium Sector Decarbonisation 48
Figure 25: Prioritised solutions for decarbonising primary aluminium sector electricity
i RE-RTC
ii BSR (Bharat Small Reactors) are 220 MW Pressurised Heavy Water Reactors (PHWR) with an impeccable safety
and excellent performance record, which are compact and tailored for captive use
iii Small modular reactor (SMR) is a nuclear reactor that is designed to be built in a factory, transported to a site,
and then used to generate power. SMR is therefore much faster to build and start operation and their small size
provides the flexibility needed for industrial operations
Source: McKinsey analysis
A. Short-term (till 2030): Renewable and Grid Power Transition
In the near term, aluminium producers can begin reducing their power-related
emissions by utilising available renewable and grid-based options.
•
Renewable Energy Round-The-Clock (RE-RTC) Power: Industries can procure
RE through open access, long-term Power Purchase Agreements (PPAs), or
develop captive renewable capacity. Round-the-clock RE ensures a stable
and cleaner power supply, helping industries decouple from coal-based
captive generation.
•
Grid Power: As India’s national grid increasingly integrates renewable power,
grid electricity now carries a lower emission intensity. Switching some of the
captive demand to grid power provides an Immediate pathway to reduce
emissions while maintaining operational flexibility.
These short-term solutions can enable the aluminium sector to achieve
quick emission gains while building readiness for deeper transition options.
However, these short-term solutions face unique challenges such as changes
in policy may create planning and investment risks for industry stakeholders.
For example, Introduction of reverse bidding in the onshore wind sector,
leading to uncertainty in power procurement. Roadmap for
Aluminium Sector Decarbonisation 49
B. Medium-term (2030–2040): Integration of Nuclear Power
In the medium term, nuclear energy can provide a secure, low-emission supply
as baseload to aluminium smelters, complementing intermittent renewable
power. Three strategic approaches will be presented:
• Installation of Small Modular Reactors (SMRs) and Bharat Small Reactors
(BSRs): These advanced reactors can be developed near industrial clusters
to supply steady and clean electricity. In addition, SMRs offer scalability,
safety, and reduced transmission losses for industrial use.
•
Group Captive Nuclear Model for Large Reactors: A few aluminium producers
come together in a group captive model to jointly invest in or contract power
from large-scale nuclear plants. This approach allows for sharing responsibility
and cost efficiency with assured access to reliable base load power.
• PPAs or Open Access from Upcoming Nuclear Plants: Industries can enter
into long-term PPAs or open access contracts with nuclear plants operated
by the government or authorised entities. This model provides flexibility to
source clean electricity without direct plant ownership.
Together, these nuclear power pathways can significantly reduce grid dependency
and provide stable, low-carbon power for smelter operations during the 2030–
2040 decade. Till now, participation in the nuclear energy sector was limited to
the central government and its entities. However, The Sustainable Harnessing
and Advancement of Nuclear Energy for Transforming India (SHANTI) Act,
2025, which was enacted by the Parliament recently, has opened up the nuclear
energy sector for participation by the private sector. The Act permits private
sectors to build, own, operate or decommission a nuclear power plant and also
participate actively in the nuclear fuel fabrication value chain. Now private players
can leverage this opportunity to invest in the nuclear energy sector and set up
captive nuclear power plants. The Bhabha Atomic Research Centre (BARC)
has also initiated development of 200 MW(e) Bharat Small Modular Reactor
(BSMR-200), which aims to repurpose thermal power plants and establish
captive power plants in energy-intensive hard-to-abate industries.
C. Long-term (2040 & beyond): Captive Thermal Power with CCUS
In the long term, coal-based captive power plants can transition towards CCUS
to achieve near-zero emissions.
CCUS Integration with Captive Thermal Power Plants:
•
Existing captive plants can be retrofitted with CCUS technologies to capture
CO₂ before it is released into the atmosphere.
• Pilot-Scale CCUS Demonstration: In the short term, a pilot-scale project
can be initiated within the aluminium sector to demonstrate the technical
know-how of CO₂ capture, transport, utilisation, and storage from thermal Roadmap for
Aluminium Sector Decarbonisation 50
power generation. This will help establish technical feasibility for future
large-scale deployment.
Over time, these actions will enable the aluminium industry to sustain reliable
power while achieving deep decarbonisation and aligning with India’s Net Zero
2070 goal. However, limitations of these long-term solutions are:
•
High investment costs and uncertainty around carbon market mechanisms.
• Lack of established legal and safety frameworks for CO₂ capture, transport,
and long-term storage.
• Insurance, liability transfer, and risk-sharing mechanisms for leakage of
stored CO₂ are not yet developed.
• Limited technical demonstration projects available to validate large-scale
deployment feasibility. Roadmap for
Aluminium Sector Decarbonisation 52 Roadmap for
Aluminium Sector Decarbonisation 53
Chapter 4:
Recommendations and
Conclusion Roadmap for
Aluminium Sector Decarbonisation 54
Chapter 4: Recommendations and
Conclusion
A phased approach will be crucial for the aluminium sector of India on it’s way to a low
carbon future. In this regard the recommendations are structured to reduce emissions
in the near term while the whole sector is prepared for low carbon transformation in
the long run.
4.1 Short-term: RE-RTC
Among these three options, RE-RTC is the low-hanging fruit. This becomes the
preferred short-term pathway for decarbonisation with the scaling-up of RE capacity
and increased RE blending grid power. The existing policy framework, comprising
ISTS waivers, RPO, and PPA, is envisaged to provide an enabling platform for the
growth of renewable energy in different sectors in the short run. This expansion,
however, needs to be supplemented with the modernisation of the grid to cope
with the greater share of renewables in the grid as well as the intermittent nature
of RE production.
This is vital, as any interruption in power supply is detrimental to aluminium production,
especially for the smelters, resulting in reduced productivity in both quality and
quantity, and also reducing the operational lifespan of the smelter.
As a safeguard against this, aluminium plants keep CPPs, which mostly use coal as
fuel. Measures to expand RE usage must account for captive power generation. The
following measures will be helpful in this regard:
• Permit dual Central Transmission Utility-State Transmission Utility (CTU-STU)
connectivity: Allow dual connectivity, especially for plants requiring voltage
levels above 440 kV, and to support simultaneous injection and withdrawal of
power from the grid.
• Enable simultaneous grid operations: Permit simultaneous withdrawal of RE
power and injection of excess CPP power into the grid to support real-time
power balancing.
• Allow conversion of CPP to individual power producer (IPP): Enable surplus
CPP generation to be sold as IPP, with relaxed conditions, and waiving additional
fees for such capacity.
4.2 Medium-term Nuclear Power
Nuclear power offers a stable, low-carbon option for the aluminium sector. To enable the
application of nuclear energy in hard-to-abate industries, the government has opened
up the nuclear energy sector for enabling active participation of the private sector.
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming
India (SHANTI) Act, 2025 permits private companies and their JVs to hold the Roadmap for
Aluminium Sector Decarbonisation 55
license for building, owning and operating nuclear power plants and fuel fabrication
facilities. The SHANTI Act also aligns India’s civil liability framework with the global
best practices and resolves the long-standing issues such as supplier’s liability. It
acknowledges the crucial role of an empowered regulator in a market shifting from
a monopoly to multiple players and empowers the Atomic Energy Regulatory Board
(AERB) with statutory status. Simultaneously, the Bhabha Atomic Research Centre
(BARC) has taken up the development of 200 MW Bharat Small Modular Reactor
(BSMR-200) in pursuance of the budget announcement of deploying indigenous
SMRs by 2033. BSMR-200 is being designed for repurposing thermal power plants
and establishing captive nuclear power plants in energy-intensive industries.
Nuclear power can be made available to industry after 2030 by 3 different approaches-
• Small Modular Reactor (SMRs): Industry stakeholders may consider establishing
Small Modular Reactors (SMRs) in proximity to their operations to meet their
electricity requirements. SMRs are expected to have low gestation period and
low land footprint. They may offer a feasible pathway for smaller units seeking
to transition towards nuclear energy.
•
Group Captive Model: Under the proposed group captive arrangement, a nuclear
power plant may be established, either in proximity to or at a distance from
aluminium smelters, to serve a consortium of aluminium industry stakeholders.
The capital expenditure for establishing the facility would be shared among the
participating industry players. In accordance with prevailing regulatory norms,
captive consumers must have a minimum ownership of 26% in the plant and
consume at least 51% of the electricity generated annually.
•
Open Access to Nuclear Power: In an open access system, industrial consumers
can procure/tender electricity from nuclear power plants situated anywhere in
the country. This system allows major consumers to procure their requirement
directly from any producer of their choice without having to bear the capital
cost of establishing a generation facility.
The SHANTI Act, 2025 empowers the Central Government to develop norms and
mechanisms for fixing the tariff of electricity from nuclear power plants. The central
government needs to develop and notify special norms and mechanisms to enable
deployment of nuclear power in aluminium sector through the above three approaches.
4.3 Long-term: Coal-based CPP+CCUS
Long-term use of CCUS can play a crucial role in the long-term decarbonisation
of coal-based captive power plants; however, to achieve this, immediate support
is required for the establishment of at least a pilot-scale CCUS project that would
establish the technical know-how related to capture, transport, utilisation, and storage
of CO₂ from aluminium smelter-linked power plants. The success of these pilots will
depend on policy and regulatory support under the proposed National CCUS Mission
in terms of a clear MRV system, plant design and equipment standards, and CO₂ Roadmap for
Aluminium Sector Decarbonisation 56
storage standards. Safety and liability protocols regarding CO₂ leakage, insurance,
and long-term site management need to be accorded explicit status.
Finally, financial incentives like carbon credit eligibility, viability gap funding, and
green taxonomy recognition for CCUS projects would be critical to bring about
active industrial participation and de-risk early investments.
While CCUS offers deep decarbonisation potential, the technology remains expensive
and commercially unproven at full industrial scale, especially for aluminium. High
capture costs, infrastructure requirements, and uncertainty around long-term storage
make it a longer-term option requiring substantial government and policy support.
4.4 Recommendations
Decarbonising the aluminium sector is essential, with nearly 76% of emissions arising
from electricity consumption. The Working Group has identified and prioritised three
practical solutions short-term transition to RE-RTC power, medium-term adoption of
captive nuclear energy and long-term deployment of CCUS with captive coal-based
power -supported by fiscal, non-fiscal and institutional coordination.
A. Short Term: Shift to RE-RTC Power
In the short term, aluminium producers are encouraged to transition towards RE-RTC
electricity through PPAs or by developing captive RE capacity. This shift includes
replacing CPP with grid electricity where feasible and contracting direct hydro power.
The RE-RTC pathway is expected to support a green power share of 3% by 2030
and 15% by 2035.
B. Medium Term: Shift to Captive Nuclear Power
In the medium term, nuclear energy can provide a secure, low-emission supply as
baseload to aluminium smelters, complementing intermittent renewable power. The
aluminium stakeholders can invest in the nuclear energy sector and set up captive
nuclear power plants by adopting three strategic approaches:
•
Installation of Small Modular Reactors (SMRs) and Bharat Small Reactors (BSRs)
• Group Captive Nuclear Model for Large Reactors and
• PPAs or Open Access from Upcoming Nuclear Plants
C. Long Term: CCUS with Captive Coal Power
In the long term, aluminium producers should deploy CCUS on captive coal power
plants to mitigate emissions from baseload operations. While CCUS represents a
critical pathway for hard-to-abate emissions, its feasibility depends on pilots and
infrastructure development. Adoption may be possible post-commercial pilot
completion, with significant fiscal and technical support required for its execution.
To support the implementation of the prioritised solutions, the following enablers
have been identified: Roadmap for
Aluminium Sector Decarbonisation 57
D. Non-Fiscal measures:
The following regulatory and operational enablers are recommended as necessary
to ensure smooth technical integration of RE-RTC power in the aluminium sector:
•
Exclusive Green Power Grid for Aluminium Production: Create dedicated green
feeders or RE power corridors for aluminium smelters and refineries, so they
receive reliable 24×7 clean electricity that is kept separate from the coal-based
grid. This ensures genuine RE-RTC supply, prevents mixing with fossil power,
and allows transparent tracking of emissions reductions.
•
Permit dual CTU-STU (Central Transmission Utility- State Transmission Utility):
Allow dual connectivity, especially for plants requiring voltage levels above 440
kV or simultaneous injection and withdrawal of power.
•
Enable concurrent grid operations: Allow simultaneous withdrawal of RE power
from the grid and injection of CPP power into the grid to facilitate real-time
balancing of power.
•
Operational flexibility: Granting of regulatory flexibility for ramp-up/ramp-down
of CPP output to meet plant operational or maintenance requirements.
• Permit conversion of CPP to IPP: Let excess CPP capacity be sold as IPP, with
relaxed conditions, and even consider waiver of additional surcharge or taxes
on such converted capacity to improve viability.
The following non-fiscal measures are necessary for the development and deployment
of nuclear power as a medium-term decarbonisation option in the aluminium sector:
• Land Boundary Regulation Reform: Amendment of the prevailing norms that
require an exclusion zone and a natural growth zone of at least 1km and 5km
radius, respectively, around a nuclear power plant. Reduction of exclusion zone
to about 500 meters, where feasible without compromising safety, would ease
land acquisition challenges especially for SMRs equipped with passive safety
features and new technologies.
•
Water Resource Management Support: Facilitate access to large volumes of water
required for nuclear operations by a factor of 4x of CPPs through coordinated
approvals and sustainable sourcing strategies.
• Right-of-Way for Wastewater Discharge: Provide regulatory support and
community involvement in securing right-of-way to discharge treated wastewater
and perception management with local stakeholders.
• Smooth Approvals and Permitting: The total time required for construction of
a large nuclear power plant is about 11 to 12 years, out of which approximately
half of the time is consumed in pre-project activities and approvals. There is a
need to fast-track the permitting system and to develop a single-window system
that will reduce delays in projects. Roadmap for
Aluminium Sector Decarbonisation 58
Non-fiscal measures that are of paramount importance for the long-term adoption
of smelter operation with CPP equipped with CCU include the following:
• Develop CO₂ transport and storage infrastructure through a hub-and-cluster
model to enable shared access and reduce costs.
• Identify and map suitable geological storage basins with government-backed
assessments to support long-term planning.
•
Streamline environmental and regulatory approvals for CCUS projects, including
transport pipelines and injection wells.
•
Facilitate coordinated industrial cluster development by aligning state industrial
policies, infrastructure planning, and stakeholder engagement.
E. Phased Institutional Coordination Measures:
The decarbonisation process of the aluminium sector requires strong institutional
coordination to be effective and timely. The strategic institutional steps are outlined
as described below.
•
Establish an inter-agency coordination mechanism involving MoP, MNRE, MoEFCC,
DAE, and NITI Aayog to ensure proper alignment and smooth implementation
of policy actions across RE, nuclear power, and CCUS technologies.
• This will involve designating a central nodal agency or green transition task
force that leads decarbonisation initiatives for the aluminium sector under
India’s overall strategy for a net-zero transition. In essence, this would ensure
coordinated efforts, monitoring of progress, and their alignment with the nation’s
decarbonisation goals. Representation will come from the government, industry,
academia, multilaterals, and other stakeholders in the green transition of the
aluminium sector.
•
Enable early interaction between industry and implementing agencies like NPCIL,
SECI, NTPC, and PGCIL, specifically with regards to planning and implementation
of RE-RTC supply mechanisms and future nuclear integration pathways. Such
interactions will help address constraints on technical, regulatory, and supply
sides in the early stages.
•
Devise a policy framework to underpin the CCUS industry. Key elements include
project permitting, long-term rights for storage, attribution of liability, and legal
clarity in preparation for CCUS technologies deployment in hard-to-abate industrial
sectors such as aluminium.
•
Harmonise the state and central clearances related to the development of green
infrastructure, including grid upgrades, RE plants, and CCUS networks near the
aluminium smelter clusters. This would reduce approval delays and allow for
faster on-ground implementation. Roadmap for
Aluminium Sector Decarbonisation 59
• Integrate the needs of the aluminium sector into the national energy transition
platforms like the National Green Hydrogen Mission and the emerging carbon
market frameworks. This would ensure that decarbonisation priorities in the sector
are suitably represented and supported by national-level policy instruments.
• Enable public-private coordination platforms that bring together industry
stakeholders, technology providers, investors, and government agencies to align
on decarbonisation investments, share knowledge, streamline financing, and
establish clear regulatory timelines.
A set of coordinated fiscal, regulatory, and institutional measures should come together
to form a stable ecosystem that can enable the transformation of the emission-intensive
aluminium sector and support energy transition throughout its value chain.
4.5 Conclusion and Way forward
As the analysis has shown, shifting the power supply to cleaner sources would not
only involve considerable investment but also require the overcoming of several
technical and legal barriers. Consultation with stakeholders suggests that a near-term
decarbonisation pathway-3% green power share by 2030 and 20% by 2035, which
is 15% from RE-RTC (Renewable Energy- Round the Clock) and 5% from captive
nuclear-is achievable. The existing framework on renewable energy will go a long
way in facilitating RE-RTC in the near future either in the form of captive capacity,
procurement from third parties, or increased share of renewables in green power.
These necessitate modernisation and reliability of the grid, thus attracting interest
at both national and state levels of the government. Support would also be needed
to facilitate simultaneous grid withdrawal and injection.
In the medium term, nuclear energy can serve as a secure, low-emission baseload for
aluminium smelters, complementing renewables. It can be adopted through three
approaches that are deployment of Small Modular Reactors (SMRs) and Bharat
Small Reactors (BSRs) near industrial clusters; group captive models, and long-term
PPAs or open access contracts with upcoming nuclear plants for flexible sourcing.
Collectively, these approaches can reduce grid dependency and provide stable,
low-carbon power for smelters in the 2030–2040 decade. The SHANTI Act, 2025,
permits private companies and their JVs to hold the license for building, owning
and operating nuclear power plants and fuel fabrication facilities thereby enabling
private industry to invest in captive nuclear power generation
CCUS is expected to remain a long-term solution, as its adoption may be delayed
well beyond 2035, pending development of necessary infrastructure and enabling
ecosystems, alongside technology adapted for the sector. This will enable the captive
coal-based power plants, maintained by the Aluminium sector, to continue as a
source of baseload power. To support this strategy, a pilot project in the sector is
recommended, as it will demonstrate the feasibility of CCUS facilities in the sector
and provide insights into necessary technical adaptations required for the sector. This
will need backing in the form of financial support, legal framework, and established
infrastructure for CCUS from capture at source to storage in sinks. Roadmap for
Aluminium Sector Decarbonisation 60 Roadmap for
Aluminium Sector Decarbonisation 61
References Roadmap for
Aluminium Sector Decarbonisation 62
References
1. BEE. 2023. Impact of Energy Efficiency Measures For The Year 2021-22. https://beeindia.gov.
in/sites/default/files/publications/files/Impact%20Assessment%202021-22_%20FINAL%20
Report_June%202023.pdf
2.
CEA. 2024. Techno-Economic Analysis of Renewable Energy Round-the-Clock (RE-RTC) Supply
for Achieving India’s 500 GW Non-Fossil Fuel-Based Capacity Target by 2030. https://cea.nic.
in/wp-content/uploads/notification/2024/02/RE_RTC_Final_Report.pdf
3. CRISIL. 2022. Assessment of the Secondary Industry in India.
4. CRISIL. 2025. “CRISIL Infrastructure Yearbook 2025.”
5.
https://www.crisil.com/content/dam/crisilcom2-0/our-analysis/reports/crisil-intelligence/2025/01/
crisil-infrastructure-yearbook-2025.pdf
6.
DoE US. 2017. “Development of an Advanced Combined Heat and Power (CHP) System Utilising
Off-Gas from Coke Calcination.” https://www.energy.gov/sites/prod/files/2014/12/f19/0416-
CHP%20Coke%20Calcination.pdf
7.
Donnison, Caspar. 2020. Bioenergy with Carbon Capture and Storage (BECCS): Finding the Win–
Wins for Energy, Negative Emissions and Ecosystem Services—Size Matters. https://onlinelibrary.
wiley.com/doi/full/10.1111/gcbb.12695
8.
EIA. 2022. “Carbon Dioxide Emissions Coefficients.” https://www.eia.gov/environment/emissions/
co2_vol_mass.php
9. EMEP. 2023. “EMEP/EEA Air Pollutant Emission Inventory Guidebook 2023.” https://www.eea.
europa.eu/en/analysis/publications/emep-eea-guidebook-2023
10. EU 2020. Circular Action Plan - A Strategy for Achieving Full Potential for Circular Economy
by 2030. https://european-.eu/wp-content/uploads/2022/08/2020-05-13_european-_circular-
-action-plan_executive-summary.pdf
11. EU Commission. 2019. COMMUNICATION FROM THE COMMISSION The European Green Deal.
https://commission.europa.eu/publications/communication-european-green-deal_en
12. Global CCS Institute. 2021. Global Status of CCS 2021: CCS Accelerating to Net Zero. https://
www.globalccsinstitute.com/wp-content/uploads/2025/08/Global-Status-of-CCS-2021-Global-
CCS-Institute-1121.pdf
13. Gibbs, M. J., Bakshi, V., Lawson, K., Pape, D., & Dolin, E. J. (2000). https://www.ipcc-nggip.iges.
or.jp/public/gp/bgp/3_3_PFC_Primary__Production.pdf
14.
HINDALCO. 2023. HINDALCO Annual Report 2023-24. https://www.hindalco.com/upload/pdf/
hindalco-annual-report-2023-24.pdf
15. Histalu. 2024. Production: From Bauxite to Alumina.” https://www.histalu.org/en/the-/the-
main-stages-of-production/-production-from-bauxite-to-alumina Roadmap for
Aluminium Sector Decarbonisation 63
16. IAI. 2023. High Direct & Indirect Employment Multiplier, Generating Nearly 800,000 Jobs.
https://international-.org/wp-content/uploads/2024/10/Good-Practice-Carbon-Footprint-
October-2023.pdf
17.
International Association. 2023. “International Association.” https://www.Aluminium.org/news/
international-Aluminium-associations-release-action-plan-ahead-g7-trade-ministers-meeting
18. IPCC 2022. Climate Change 2022: Mitigation of Climate Change. https://www.ipcc.ch/report/
sixth-assessment-report-working-group-3/
19. JMK Research and Analytics 2025. Green Power Procurement - Sector in India. https://
jmkresearch.com/wp-content/uploads/2025/04/Green-Power-Procurement-by--Sector-in-
India_JMK-Research.pdf
20.
Liu, Li. 2023. Recent Advances of Research in Coal and Biomass Co-Firing for Electricity and Heat
Generation. Volume 2, Issue 4, December 2023, 100063. https://doi.org/10.1016/j.cec.2023.100063
21. McKinsey, MineSpans. 2024. McKinsey MineSpans - Decarbonisation Pathway Model Q2 2024.
https://www.mckinsey.com/industries/metals-and-mining/how-we-help-clients/minespans
22.
Mignacca, B, and G Locatelli. 2019. Economics and Finance of Small Modular Reactors: A Systematic
Review and Research Agenda. Volume 118, February 2020, 109519. https://doi.org/10.1016/j.
rser.2019.109519
23. Mineral Commodity Summaries. 2024. Mineral Commodity Summaries 2024-U.S. Geological
Survey. https://pubs.usgs.gov/publication/mcs2024
24. Ministry of Mines. 2025. “Ministry of Mines- https://mines.gov.in/webportal/content/
25. Ministry of Mines, GoI. 2023. Ministry of Mines-Annual Report 2023-24. https://mines.gov.in/
admin/download/66acba735b26c1722595955.pdf
26. Mission possible partnership. 2023. Making Net zero possible https://staging.
missionpossiblepartnership.org/wp-content/uploads/2023/04/Making-1.5-Aligned--possible.pdf
27. NALCO. 2023. NALCO Annual Report 2023-24 Strategic Growth Paving the Path to Sustainable
Future. https://nalcoindia.com/wp-content/uploads/2024/08/43rd-Annual-Report-2023-24-.pdf
28. NITI Aayog. 2017. Need for a Policy in India. http://164.100.94.191/niti/writereaddata/files/
document_publication/niti_Aluminium_upload.pdf
29. NITI Aayog. 2022. Carbon Capture, Utilisation and Storage (CCUS) Policy Framework and
Its Deployment Mechanism in India. https://www.niti.gov.in/sites/default/files/2022-12/
CCUS-Report.pdf
30. Novelis, Press release. 2024. Novelis to Build $2.5 Billion Low-Carbon Recycling and Rolling
Plant. https://www..com/en-gb/news-center/industry-news/5-18-3.html#:~:text=planning%20
your%20show.-,Novelis%20to%20Build%20$2.5%20Billion%20Low%2DCarbon%%20Recycling%20
and,and%20sustainable%20of%20its%20kind
31. Øye, Harald A. 2011. “Power Failure, Restart and Repair.” https://.com/content-images/
news/Oyeweb.pdf Roadmap for
Aluminium Sector Decarbonisation 64
32. Rivoaland, Loig. 2016. “Development of a New Type of Cathode for Electrolysis.” https://icsoba.
org/proceedings/34th-conference-and-exhibition-icsoba-2016/?doc=75
33. Sripathy, Pratheek. 2024. Evaluating Net-Zero for the Indian Industry. https://www.ceew.in/
sites/default/files/how-can-low-carbon-sustainable--reduce-carbon-emissions-in-india.pdf
34. Tabereaux, Alton T., and Ray D Peterson. 2014. Chapter 2.5 - Aluminium Production. Volume 3:
Industrial Processes 2014, Pages 839-917. https://www.sciencedirect.com/science/article/abs/
pii/B9780080969886000237
35. The Goldman Sachs Group, Inc. 2020. Green Hydrogen: The Next Transformational Driver of
the Utilities Industry. https://www.goldmansachs.com/pdfs/insights/pages/gs-research/green-
hydrogen/report.pdf
36.
Vedanta. 2024. Vedanta Sustainability Report 2024. https://www.vedantalimited.com/uploads/
esg/esg-sustainability-framework/Sustainability-Report-FY2024.pdf
37. WindEurope. (2021). Wind Energy in Europe 2021: Statistics and the Outlook for 2022–2026.
Available at: https://windeurope.org/data/products/wind-energy-in-europe-2021-statistics-and-
the-outlook-for-2022-2026/
38. WindEurope. (2021). Offshore Wind Energy – Policy and Potential. https://windeurope.org/
policy/topics/offshore-wind-energy/
39. World Economic Forum. 2020. for Climate: Exploring Pathways to Decarbonise the Industry.
https://www3.weforum.org/docs/WEF__for_Climate_2020.pdf
40. World Energy Council India. 2022. Pumped Storage Development as a National Strategy for
Long Term Energy Storage to Meet Net Zero Emissions Target for India. https://wecindia.
in/wp-content/uploads/2023/03/Pumped-Storage-Development-as-a-National-Strategy-for-
Long-14_12_22.pdf Roadmap for
Aluminium Sector Decarbonisation 65 Roadmap for
Aluminium Sector Decarbonisation 66 Roadmap for
Aluminium Sector Decarbonisation 67
Annexures Roadmap for
Aluminium Sector Decarbonisation 68
Annexure 1
Table 2: The sectoral technical working committee on Aluminium
S. No.Composition
1 Shri lshtiyaque Ahmed, Sr. Advisor, NITI Aayog Chairman
2 Shri Rajnath Ram, Advisor, NITI AayogMember
3 Representative from the Ministry of MinesMember
4 Representative from BEEMember
5
Representative from Jawaharlal Nehru Aluminium Research,
Development & Design Centre
Member
6
Representatives at the level of Chief Sustainability Officer
or equivalent:
Member
• Hindalco
• Vedanta
• NALCO
• Jindal Aluminium
Member
Member
Member
Member
7 Shri Jawahar Lal, General Manager, Energy, NITI Aayog
Member Secretary
8 McKinsey & CompanyKnowledge Partner
9 WRI IndiaKnowledge Partner
Terms of Reference (ToR) for the committee were:
(i) Identifying the sources of emission along the production value chains and
establishing baseline sectoral emissions.
(ii) Analysing the current strategies of the government and private sector.
(iii) Analysing the international market trends and preparing the sector outlook on
competitiveness.
(iv) Identifying and prioritising the various decarbonisation levers for each sector,
including circular economy and resource efficiency.
(v)
Developing sector-specific abatement curves to illustrate decarbonisation levers,
their potential abatement, and associated costs.
(vi)
Identifying key projects and enablers required to achieve aspired decarbonisation
pathways, including:
a. Policy and Regulatory frameworks.
b.
Technology interventions, with high-level assessment on commercial viability.
c. Sources of capital and funding.
(iv)
Formulating sector-specific action plan and associated financial funding mechanism.
(v) Any other measures/activities required for achieving the objectives of
the Committee. Roadmap for
Aluminium Sector Decarbonisation 69
Annexure 2
Table 3: Comprehensive list of 30 initiatives for decarbonisation
1 Advanced analytics to reduce non-carbon costs (NCC)
2 Coating of anodes
3 Fluidised bed calcination
4 Energy Efficiency - Refining
5 Energy Efficiency – Smelter
6 Improved cell-lining
7 Graphitised cathode
8 CHP and waste-heat cogeneration
9 Optimise anode design
10 Smart pot controllers
11Tube digester
12 Biomass/MSW use for steam and LNG use in calciners
13 MVR+H2
14 Carbo-chlorination w/out CO
2
regeneration
15 Hall-Héroult + Carbon Capture and Storage (CCS)
16 Inert anode
17 Hydrogen Calciner
18 Hydro
19 SMR
20 Nuclear Reactor
21 NG+CCUS
22 Coal + CCUS
23 BE+CCUS
24 On-shore wind
25 Off-shore wind
26 Solar PV
27 Solar CSP
28 RE RTC (Third Party Open Access)
29 RE RTC + Pumped hydro
30 RE RTC + battery NOTES Roadmap for
Aluminium Sector Decarbonisation 72

Roadmap for Aluminium Sector Decarbonisation