Sustainability is the key to success

The carbon footprint also depends on other factors, including the production of aluminium oxide, carbon emissions from electrodes, and silicon addition, which affect alloys like AlSi7 or AlSi10. The silicon alone has a carbon footprint of six to nine kilograms carbon dioxide per kilogram silicon. China's primary aluminium production, reliant on coal power, has the highest carbon footprint. 

The Secondary Alloy Dilemma

Even better would be to use secondary alloys made from scrap. They offer a sustainable alternative. Still, their carbon footprint depends on the scrap's origin, divided into post-industrial and post-consumer categories. Post-consumer scrap is a favourable choice, with a carbon footprint of zero kilograms carbon dioxide per kilogram aluminium. Post-industrial scrap's carbon footprint considers the production process. 

The type of alloy further complicates matters. Sheet metals and casting alloys have distinct characteristics. Sheet metals generally contain minimal alloying elements, while casting alloys with higher silicon content are used in automotive applications. These alloys require high purity, restricting elements like iron, copper, and zinc.

However, the challenge is sourcing scrap. High-iron sheet metals limit their utility as scrap sources, while casting alloys necessitates significant silicon addition, increasing the carbon footprint. The situation worsens when considering older vehicles with alloys like 226 or AlSi9Cu3. They cannot be recycled to high-elongation alloys. Scrap sources are limited, and securing a stable supply network is essential.

Energy Consumption of Aluminum Alloys

Foundries, known for their energy-intensive nature, face a pressing issue in Europe: the surge in energy costs. Thin margins have become standard, yet energy prices have remained stable for years. While metal prices can adapt to market changes, energy costs are fixed long before production begins. This fixture creates an unbearable situation for many foundries.

The transformation from solid aluminium ingots to finished parts is an energy-intensive process. It takes 657 kilojoules (0.183 kilowatt-hours) to heat a kilogram of aluminium to its 750 degrees Celsius melting point. An additional 390 kilojoules (0.108 kilowatt-hours) are needed to melt the aluminium.

CBAM is Going to Hit Hard

CBAM, a European Union (EU) policy tool, aims to combat carbon leakage and level the playing field for EU industries in climate change mitigation. It aligns the carbon costs of imported goods with those faced by EU producers. CBAM will focus on carbon-intensive sectors, imposing a carbon price on imports based on their carbon footprint. Importers must meet CBAM requirements for monitoring and verification to ensure accuracy.

CBAM could incentivise non-EU countries to adopt stricter climate policies and encourage EU industries to invest in cleaner technologies. Yet, concerns about trade tensions and global supply chains must be addressed.

The transition period for CBAM ends on January 1, 2026, meaning enterprises with non-EU suppliers will face carbon emission taxes, highlighting the importance of supporting local suppliers. Depending on the price of carbon emissions, these taxes can easily double the casting cost.

A fundamental strategy for enhancing sustainability lies in the optimisation of casting mass. This involves a meticulous reevaluation of wall thickness in castings. By judiciously reducing wall thickness while ensuring that mechanical properties not only meet but exceed specifications, it becomes possible to trim the weight of the casting. This weight reduction conserves precious resources and significantly reduces carbon footprint, rendering it a resolute and sustainable choice.

Another pivotal facet of sustainability in the casting process revolves around the tools employed. The production of these tools is an energy-intensive process encompassing manufacturing, machining, heat treatment, and delivery. Extending the lifespan of casting tools represents a proactive strategy to reduce the carbon footprint associated with each produced part. When tools enjoy a lengthened lifespan, the emissions generated during their production are distributed across a greater number of castings.

Rheocasting is one of the most innovative techniques for sustainable castings. This advanced method presents a transformative solution to enhance both the mechanical properties and the carbon footprint of castings. Rheocasting allows casting alloys with higher iron content while maintaining exceptional mechanical properties. Furthermore, it reduces the reliance on excessive silicon in alloys. This reduction in silicon content yields a substantial positive impact on the carbon footprint. 

Enhancing Enterprise Value through Sustainability: A Strategic Imperative

Within the dynamic landscape foundries, sustainability has emerged as a paramount imperative. It's not merely an ethical obligation but also a strategic journey that has the potential to significantly boost the enterprise value of companies operating within the sector. 

One of the most direct and discernible ways sustainability augments enterprise value is through cost reduction. Sustainability initiatives, especially those geared towards enhancing energy efficiency and resource management, lead to discernible decreases in operational costs that directly impact the profit margin. Efficient energy management streamlines operations optimises resource allocation, and minimises waste, all cumulatively amounting to significant cost savings. 

When a company integrates sustainable practices into its operations, it optimises its energy consumption, machinery utilisation, and resource allocation. This optimisation results in heightened productivity and streamlined processes. It generates more output with fewer resources, making it an enticing prospect for investors. Improved operational efficiency underscores astute management and responsible resource stewardship.

Sustainability isn't just about cost savings and operational improvements; it also encompasses effective risk management. As energy costs continue to rise and environmental regulations become more stringent, companies that proactively manage their energy consumption and invest in energy-saving initiatives are better equipped to navigate these shifting landscapes.

By mitigating financial and regulatory risks through sustainability initiatives, a company doesn't merely ensure its stability but also instils confidence in its future growth potential. This proactive approach to risk management significantly boosts the enterprise's value by assuring investors and stakeholders.

Companies renowned for their sustainability practices are more likely to garner the loyalty of customers who appreciate ethical and environmentally conscious businesses. They also become magnets for top talent looking to work for companies with a robust social and environmental conscience.

Moreover, this positive stakeholder perception contributes to an expanded market share and heightened brand loyalty. A strong and sustainable brand inherently possesses greater value, often commanding premium prices and inspiring increased customer loyalty. The augmented brand value directly fuels the growth of enterprise value.

In Conclusion: A Strategic Imperative for Enterprise Value Growth

The journey toward sustainability in the aluminum foundry industry is not only a moral or regulatory duty but a strategic imperative. Embracing sustainability isn't just an ethical decision; it's also a financial one. It represents a lucid opportunity to enhance enterprise value, making companies more competitive, profitable, and appealing to investors and potential acquirers.

In this intricate dance, the industry isn't merely a passive player; it's a pivotal force that can shape an environmentally friendly and economically viable future. By seamlessly integrating sustainability into their core operations, companies within the aluminium foundry sector can diminish their environmental impact and establish a more robust and valuable business.

The journey toward sustainability isn't just about reducing the industry's carbon footprint; it's about augmenting its overall value and positioning it for long-term prosperity in a shifting world. Sustainability isn't just a responsibility; it's a strategic and financial opportunity that should not be overlooked.