Norsk Hydro

Resilient in weak markets, positioned for growth - Seite 3

“We have made good progress on our decarbonization agenda this quarter. Hydro Rein has successfully brought Mendubim and Boa Sorte into commercial operation on time and on budget, supplying Alunorte and Albras with affordable renewable energy. At Alunorte, we are now producing alumina fueled by LNG, with significant CO2 reduction, as well as cost savings when fully ramped up by the second half of this year, lifting profitability and driving sustainability,” says Aasheim

Securing access to renewable power is crucial for growing in low-carbon aluminium. In Energy, Hydro has secured two new long-term power purchase agreements (PPAs) during the first quarter. Statkraft will supply 1.28 TWh from 2024 to 2027, and Alpiq will provide 0.54 TWh from 2025 to 2033. Hydro Rein has started commercial operations in the Brazilian solar plants Mendubim and Boa Sorte, providing approximately 1.55 TWh of renewable power to Hydro Alunorte and the Albras smelter. Both projects were delivered on time and cost. The transaction with Macquarie Asset Management is progressing as planned and is expected to be completed by the end of the second quarter.

During the first quarter, Hydro executed on its ambitious decarbonization roadmap, aiming for a 30 percent reduction in carbon emissions by 2030. At Alunorte, fuel switching and boiler electrification are driving this effort, enabling the production of low-carbon smelter grade alumina. Hydro Alunorte started producing alumina with natural gas in March and this is expected to cut annual emissions by 700,000 tonnes of CO2, yielding substantial cost savings estimated at USD 160 to 190 million annually based on current spot and forward price spreads when fully implemented by the second half of this year. This is supporting the ongoing work to lift profitability above 10 percent adjusted RoaCE in Bauxite & Alumina.

Regulatory advancements include the agreement on the CO2 compensation scheme in Norway, effective from 2024 to 2030, setting an annual maximum compensation of NOK 7 billion, eliminating the CO2 quota price floor, and requiring participating industries to implement emission reduction measures equivalent to 40 percent of the compensation received.

“The recently announced agreement with Norwegian authorities on the future of the CO2 compensation scheme is an important enabler for our continued investments in decarbonizing our Norwegian portfolio, while providing predictability towards 2030,” says Aasheim.