Low-Carbon Aluminum Market to Reach $119.97 Billion by 2031

21 May 2024

The low-carbon aluminum sector is currently experiencing robust expansion, largely fueled by the escalating demand for carbon reduction across various commodities, including aluminum.

Within this market, key players encompass primary aluminum producers, aluminum recyclers, manufacturers of value-added aluminum products, OEMs, and end consumers. The adoption of low-carbon aluminum is increasingly prevalent across various sectors such as transportation, construction, electrical engineering, foil and packaging, among others.

Novelis, a global pioneer in aluminum rolling and recycling and a leading developer of sustainable aluminum solutions, announced the launch of its new roll-forming development line on May 22, 2023.

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While still evolving, this market is primarily led by Europe, with other regions such as North America, the Middle East, Africa, Asia-Pacific, China, and South America also making strides in its development.

Low-Carbon Aluminum Market Overview

Within industries, the automotive sector stands out for its concentrated efforts towards decarbonization, showcasing substantial uptake of low-carbon aluminum. Government regulations also play a pivotal role in driving the adoption of this material.

Notably, its application aids in vehicle weight reduction, thereby enhancing fuel efficiency. Moreover, the utilization of low-carbon aluminum contributes to CO2 emission reduction, highlighting its environmentally friendly impact within the automotive realm.

The global low-carbon aluminum market is projected to reach $119.97 billion by 2031 from $81.89 billion in 2022, growing at a CAGR of 4.3% during the forecast period 2022-2031.

Europe and North America are the primary regions expected to embrace low-carbon aluminum extensively. Globally, many collaborations between manufacturers, suppliers, and end users of low-carbon aluminum have catalyzed substantial market expansion.

Market Segmentation:

Segmentation 1: by End User
•    Transportation
•    Building and Construction
•    Electrical Industry
•    Consumer Goods
•    Foil and Packaging
•    Machinery and Equipment
•    Others

Based on end users, the low-carbon aluminum market is estimated to be led by the transportation segment during the forecast period 2022-2031.

Segmentation 2: by Source of Production

•    Solar Energy
•    Wind Energy
•    Hydro Energy
•    Recycling
•    Carbon Capture and Storage (CCS)
•    Others

Based on the source of production, the low-carbon aluminum market is estimated to be led by the recycling segment during the forecast period 2022-2031.

Segmentation 3: by Product

•    Flat-Rolled
•    Castings
•    Extrusion
•    Forgings
•    Rod and Bar
•    Others

Based on the product, the low-carbon aluminum market is estimated to be led by the flat-rolled segment during the forecast period 2022-2031.

Segmentation 4: by Region

•    North America - U.S., Canada, and Mexico
•    Europe - Germany, France, Italy, Spain, Russia, and Rest-of-Europe
•    China
•    U.K.
•    Asia-Pacific and Japan - Japan, India, South Korea, ASEAN, and Rest-of-Asia-Pacific and Japan
•    Rest-of-the-World - Middle East and Africa and South America

In the global low-carbon aluminum market, Europe and North America are anticipated to gain traction in terms of low-carbon aluminum production, owing to the presence of the world’s largest manufacturers in those regions.

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Demand Drivers and Limitations in the Low-Carbon Aluminum Market

The following are the demand drivers for low-carbon aluminum market:

•    Increasing Attention of Governments toward Decarbonization of Core Contributing Commodities

•    Growing Research and Development Activities to Achieve Near Zero Emissions

The market is expected to face some limitations due to the following challenges:

•    Lower Recycling Rates for Aluminum in Various Industries

•    Volatile Low-Carbon Aluminum Prices

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Analyst View

As stated by Sachin Singh, Lead Analyst at BIS Research, "The surge in demand for low-cost recycled aluminum is propelling the rise of low-carbon aluminum. Recycling rates for aluminum are on the rise in both developing and developed nations, particularly for post-consumer scrap.

Across the ecosystem, numerous companies are innovating new technologies to curtail carbon emissions, aiming for near-zero or net-zero carbon footprints. Among end users, the automotive sector leads in adoption, driven by auto-manufacturers' endeavors to achieve a net-zero scenario by mitigating carbon emissions across their entire value chain."