Recycling to a Better Future

There has never been a better time for OEMs and consumers to use recycled aluminum, so why isn’t it being used more?

75% of all aluminum ever produced is still in circulation today. That makes it an astounding sustainability story, but it also means that the world’s primary aluminum producers are forced to compete endlessly with recycled material they produced years ago. New application development for aluminum is driven by primary aluminum producers. They are providing a huge service by investing in R&D to expand the horizons of aluminum, but they also focus on developing specifications that are hard to make with recycled material. In many applications, “over-engineering” specifications is done to protect market share for primary alloys. For example, the shift of the Ford F-150 to an aluminum frame and body is around 1B lbs per year of new aluminum use. The alloys specified for for the program were primary grade alloys with very tight specifications that are nearly impossible to produce with post consumer recycled material.

The F-150 has been a gigantic success, and many other car platforms are shifting to aluminum. At the same time, the price of recycled aluminum has plummeted due to the increase in scrap availability. The delta between recycled alloy pricing and primary aluminum is at an all time high, and the economic benefit of using recycled aluminum isn’t going away. Projections are that by 2028 there will be 1.6 Billion more pounds per year of post consumer aluminum generated from recycling streams - just from the impact of higher aluminum content in cars and trucks. On top of that, China is dramatically reducing scrap aluminum imports, and forecasts are that within 3-5 years, China could be completely self sufficient in terms of it’s own scrap generation. This would reduce demand for North American aluminum scrap by billions of pounds per year. At the same time scrap availability is increasing, the shift to electric vehicles is reducing demand for the two largest components that are currently made from recycled material - the engine and transmission of internal combustion engines. This is setting the stage for an unprecedented and sustained low price environment for recycled aluminum - and an incredible opportunity for OEMs and consumers.

Lower prices will spur more domestic demand for recycled aluminum alloys. Today A380, the generic recycled aluminum casting alloy, is priced over $.30/lb below primary aluminum. That is a huge financial incentive for OEMs to shift to from primary based alloys to ones that can be made with recycled content. If history is a guide, technical and mechanical barriers will be overcome for most applications, and economics will be a driving force for more demand for recycled alloys. Almost all aluminum applications have shifted from primary to recycled alloys over time. For instance, engines and transmissions originally started as primary alloys and have shifted almost entirely to recycled alloys. Even many extrusion and sheet applications have made the transition - beverage containers are designed now to be made with recycled alloys, and LEED certification incentivizes building extrusions to be recycled. There are relatively few reasons why recycled alloys can’t work for any given application, and for the foreseeable future there will be more incentive than ever for OEMs to use recycled aluminum.

In addition to providing direct assistance for OEMs, Spectro Alloys helped form Aluminum Recyclers Council to highlight this opportunity and to promote the use of recycled aluminum alloys. You can learn more about ARC and its mission at recyclealuminum.org.

About Spectro Alloys: Spectro Alloys is where the rubber meets the road in aluminum recycling. We transform post consumer and post industrial scrap into something that can be used again. Recycling aluminum uses about 90% less energy and releases about 90% less CO2 than making virgin aluminum. The environmental impact is staggering - recycling at Spectro saves enough energy to power every home in Minneapolis, and reduces green house gas emissions equivalent of taking over 100,000 cars off the road. And that is just the start. A significant amount of aluminum recycled at Spectro Alloys ends up in cars and trucks as a lighter alternative to steel products - increasing miles per gallon and further reducing the environmental impact of transportation. As more and more cars and trucks move from steel to aluminum for it’s light weight, the environmental benefits will compound, and more and more aluminum will be in circulation.