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Albemarle’s sustainability pledge includes push for greener lithium
US-based specialty chemical company Albemarle announced a set of sustainability goals, including aiming for net-zero carbon emissions by 2050.
Goals also include a 35% reduction in carbon intensity for the company's catalysts and bromine business by 2030, and a commitment to "growing the lithium business in a carbon-intensity neutral manner by 2030." The company also announced initiatives around water use and resource efficiency.
The emission reductions will come in phases, with an early focus on building out infrastructure to measure and track progress, and on what CEO Kent Masters called "low-hanging fruit" projects to cut emissions. "We've identified some projects and are working on them," Masters said. This includes water recycling projects in Australia and Jordan, and a $100 million investment in a thermal evaporator in Chile.
Beyond that, "we expect to reach our GHG targets through grid greening, efficiency improvements at existing plants and design improvements at our new lithium plants," Masters said. Albemarle has already taken steps towards greener power generation, with its lithium brine operations at Salar de Atacama, Chile powered by solar, and facilities in China moving from coal power to natural gas, Masters added.
"The company is focused on reducing its own carbon footprint, and helping customers meet their own ESG needs," says Laurence Alexander, an analyst with investment bank Jefferies. "The company estimates that for each 1 kg of CO2 produced when making lithium, 50 kg of emissions will be avoided by customers."
Albemarle is undertaking aggressive capacity expansion in lithium to meet growing demand from the electric vehicle (EV) market. Projects in Chile and Australia will, combined, increase the company's lithium conversion capacity by 175,000 mt/year of lithium carbonate equivalent (LCE), with commercial volumes expected to be available in 2022.
"In the US, support for EVs and for domestic battery material production should provide a significant tailwind," for Albemarle, Alexander said.
With major expansion plans in the offing, a reduction in carbon intensity is the goal. This will be achieved at first through grid greening and process improvements, with offsets such as forestation projects possible down the road.
Reductions in water use are also critical for lithium operations, which are often in water-constrained regions. While Albemarle's Chile operations do not use freshwater in lithium processing, some water is used in conversion, and operations in China and Australia use water for processing and conversion. "We are looking at water recycling projects," Masters said.
A greener lithium production process is "a key part of the value proposition to our customers," according to Masters. "Our customers, especially in lithium and electric vehicles, are asking us about sustainability targets." With EVs themselves seen as a greener alternative to internal combustion engine vehicles, having a green supply chain for EVs is particularly critical, Albemarle executives say.
However, "our sustainability strategy does not chain our return [on capital] expectations," Albemarle Chief Financial Officer Scott Tozier said. "As we look at new projects, we expect that they will generate at least two times the cost of capital at mid-cycle pricing. That includes sustainability projects."
Opportunities in bromine and catalysts
Albemarle's bromine business bears some similarity to its lithium business, in that its key product is processed from brine, often located in resource-sensitive areas. The company is aiming to improve resource efficiency and water usage at its bromine operations in Jordan and the US, with an additional focus on water recycling in the former.
For catalysts, Albemarle sees some market opportunities in sustainability. "There are opportunities … in renewable fuels," Masters said. "Our technology applies well there, although it is a pivot. We have a nice position in that space today and it's a strategic focus."
-- Original reporting by Vincent Valk, Chemical Week.
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