🇳🇴 Pedal to the metal – Hydro and Porsche accelerate collaboration by launching new business model for low-carbon aluminium supplies

The aluminium and renewable energy company Hydro and German sports car manufacturer Porsche AG are gearing up their joint efforts to further decarbonize the supply chain of Porsche’s sports cars. The agreement signed in Stuttgart on July 9 pioneers a new business model for low-carbon aluminium to drive sustainability and transparency in the automotive industry.

Hydro and Porsche signed a letter of intent in April 2023, aiming to reduce the carbon footprint of Porsche’s car models. Based on this framework, the two companies have now signed a long-term agreement that opens for Hydro to deliver best-in-class, low-carbon aluminium for Porsche’s vehicle production in the years to come. Capacity reservation and product development of low-carbon aluminium will allow Porsche to increase the use of recycled materials and reduce the carbon footprint of aluminium components. This will support their efforts to achieve a net-carbon neutral value chain of newly produced vehicles in 2030.

“With this collaboration, we bring an innovative business model to the market to allow industries to further decarbonize their supply chains. We are very excited to work with a fast moving pioneer like Porsche to help them deliver on their ambitious climate targets. I hope this serves as an inspiration for others to follow suit,” says Eivind Kallevik, President and CEO of Hydro.

The scope of the agreement includes both Hydro REDUXA primary low-carbon aluminium and Hydro CIRCAL 75R recycled aluminium containing a minimum of 75 percent post-consumer scrap. The aluminium is expected to go into the production of Porsche’s next generation of sports cars.

In addition to potential future deliveries of low-carbon and recycled aluminium, the agreement entails technical collaboration on the development of new alloys with higher recycled content. The two companies will also explore how Hydro’s long-term decarbonization projects, including the emission-free smelting technology currently under development, can be integrated into Porsche’s supply chain.

“The collaboration with Hydro is an important milestone for Porsche on our path to decarbonization along the entire value chain. In addition, the partnership contributes to responsible sourcing, because Hydro’s aluminium supply chain is transparent,” says Barbara Frenkel, Executive Board Member for Procurement at Porsche AG.

Transparency and traceability from mine to metal

Hydro’s integrated value chain, which spans from bauxite mining and alumina refining, to energy generation, smelting, extrusion, and recycling, allows the company to offer low-carbon aluminium products with traceability and transparency in every step from mine to metal. This is key to document emission cuts and reach Hydro’s target of 30 percent reduction in carbon emissions by 2030, driven to a large extent by fuel switch and boiler electrification using renewable energy at the Alunorte alumina refinery in Brazil.

Hydro’s approach involves radically rethinking every step of the value chain to take the lead in the green aluminium transition. The decarbonization needs to support just transition and contribute to a nature-positive future.

“Securing access to responsibly sourced materials is a key challenge for the automotive industry, and we are happy to be part of the solution. There is no such thing as a fast lane towards a more sustainable future, but together with Porsche we are accelerating our efforts. Our collaboration is a great recognition of Hydro’s work to decarbonize, minimize environmental impact and contribute to viable societies along the entire aluminium value chain,” says Kallevik.