12th Australasian Aluminium Smelting Technology Conference

Queenstown, New Zealand 2018

Innovative technology for a

greener metal of the future
Svein Richard Brandtzæg, President & CEO of Hydro
The 12th Australasian Aluminium Smelting Technology Conference
Queenstown, New Zealand, December, 2018

Learning from the best

Postdoctoral
research:
Producing
alumninium in
the laboratory at
University of
Auckland in the
happy 80’s

30 years on…
Reunion with
professor Barry
J. Welch,
University of
Auckland

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The global and complete aluminium company
“…create a more viable society by innovative and efficient use of natural resources and products”

More than 110 years of Aluminium Hydropower Engaged in the entire 35,000 employees at Involved and
industrial development – metal of the future – infinitely recyclable value chain – 150 locations in more engaged
and responsibility «green» energy R&D, innovation and than 40 countries
tailormade solutions

Alumina Energy

Bauxite Primary Metal

Recycling

Use phase Rolled Products

Extruded
solutions

Fully integrated across the aluminium value chain and markets

Broad products and solutions offering from bauxite to end-user products

Bauxite Transport & Building & Packaging Electronics & Machinery & Consumer
automotive construction electrical equipment durables

Alumina

Energy

Primary Metal

Rolled Products

Extrusion

Recycling

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 Aluminium
supported by
strong
fundamentals

Aluminium’s reach is growing in response to key long-term trends

Substitution continues to be a key driver for aluminium

Transport 3-4% Packaging 2-3% Building & 2-3% Electrical 2-3% Semis
& foil construction ~3 %

Urbanization
Lightweighting Urbanization Substitution
China moderating
Substitution Sustainability Urbanization
Energy-efficient
Auto sales Substitution Electrification
buildings
Primary Recycling*
2-3 % 3-4 %

Global semis demand for segment, CAGR 2017-2027

Source: CRU, Hydro Analysis

* Post-consumer and fabrication scrap
** Unallocated creep estimated at same level as unallocated disruptions
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Aluminium demand continues to outpace other base metals
China still has considerable growth potential from a per capita perspective

Aluminium continues to be the fastest growing base metal Growth rates dependent on level of economic maturity
Global demand base metals Semis demand growth 2016
Index 2000=100
9%

8%
India
270

7%

220 6% China
5%

170 4% Western Europe

North America
3%

120 2%

1%

70 0%
0 20,000 40,000 60,000

Size of bubbles: Real GDP per capita

Aluminium primary Copper Lead Zinc Nickel Accumulated semis demand = 0,5 mt (PPP adjusted, USD)
per capita 1950-2016

Source: CRU, Hydro analysis

Addressing
the climate
paradox

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The climate paradox
Increasing share of aluminium production is coal-based

CO2 emissions and main energy source in Aluminium production by power source
Mill tonnes
aluminium production by country
Tonne CO2 / tonne aluminium
Coal 90
20
Forecast
18 80
16
70
14
12 60

10 Gas 50
8
40
6
Hydropower 30
4
2 20
0
10
United States

Qatar
UAE

Brazil

Norway
South Africa

Australia

Bahrain

Saudi Arabia

Canada
India

China

Russia

Malaysia

Iceland

0
2000 2005 2010 2015 2020 2025

Direct Indirect Hydropower Nuclear Gas Coal

Source: CRU

Building on the lowest carbon footprint in the industry

More than two thirds of our global production is based on hydropower

Lower direct emissions in Hydro

Kg CO2e/Kg aluminium
8

6 -70%
4

0
1990 1995 2000 2005 2017

Hydro in leading industry position on CO2 emissions

Kg CO2e/Kg aluminium
20

15

10

0
Global incl. China Hydro Norway

Source: CRU, Hydro Analysis, IAI

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Deutsche Bank: «Norsk Hydro, the decarbonisation standout»

Hydro’s climate strategy: Carbon-neutral

Production: from a life-cycle perspective by 2020
Reduction in 2.5 «Among the aluminium
own emissions
producers, we see
2.0
Norsk Hydro as one of
Products: 1.5 the standout winners of
Use-phase the global drive
1.0 towards
benefits
0.5
decarbonisation and
CO2 pricing»
Recycling of 0.0 Deutsche Bank,
2012 2013 2014 2015 2016 2017 2018 2019 2020
end-consumer 17 April, 2018
-0.5
scrap
-1.0

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Part of the solution – turning words into action

Industrial strategy, business development and climate ambitions hand in hand

Value-creating, climate
friendly investments
Karmøy technology pilot
Primary Metal, Norway

Automotive line 3
Rolled Products, Germany

UBC recycling line

Rolled Products, Germany

Production Wind power sourcing

Products Energy, Norway
Recycling
Fuel switch Project
Bauxite & Alumina, Brazil

ISAL acquisition
Primary metal, Iceland

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Hydro’s climate strategy converted into low-carbon products
Our uniqueness is our integrated value chain, high share of hydropower and post-consumer scrap recycling

Hydro 4.0 Hydro 75R

All-in approach At least 75% post-consumer

recycled aluminium
Maximum or below
4.0 kg CO2e/kg Al Verified by DNV GL based
on traceability and quality
Verified according to principles developed by Hydro
ISO 14064 by DNV GL

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Driving innovation, R&D and product development

Support customers, increase market share and lift efficiency

Next- Automotive
generation lightweighting
electrolysis

Low-carbon, Digitalization
circular and Industry
solutions 4.0

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 Electrolysis
technology – the
heart of the Al
company

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Karmøy Technology Pilot – producing greener aluminium

Hydropower-based and benchmark on energy consumption and emissions

• Annual production of 75 000 mt

− 48 HAL4e cells, 12.3kWh/kg
− 12 HAL4e Ultra cells, < 11.8
kWh/kg

• Verifying next generation low-

energy electrolysis technology

• Spin-offs for existing portfolio

• Hydro Projects (EPCM

engineering/procurement teams)

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Reduced energy consumption by advanced modelling & new design

• Combining geometric design and material selection to obtain best match of

− Reduced power input
− Suitable heat balance
− Appropriate thermal & thermomechanic behaviour

• Significant improvement potential found in

− Design of anode yokes
− Design of cathode assemblies
− Design of busbar system and contacts

• Emphasizing improved control platform – 4.0

− Reduce process variability

• Stable operation at short interpolar distance

− Control magnetohydrodynamics
− HAL4e: CE > 95.0 % @ ACD < 30 mm

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A new electrolysis benchmark challenging the laws of nature

Hydro with world-leading combination of energy consumption and productivity

14 Energy consumption (kWh/kg)

HAL300

13

HAL4e

12
HAL4eUltra

Competitor technology Ambition

Hydro tested technology
Hydro technology under development
Low energy
Current density (kA/cm2) = Productivity
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Karmøy Technology Pilot
A huge step for a mature production technology

60 30

50 25

Relative energy improvement speed (%)

More than low energy
40 20
consumption
kWh/kg Aluminium

30 15
World-leading combination:
• Energy consumption
• Productivity
20 10
• Capex
• Environmental
10 5
footprint

- -
1886 1900 1920 1940 1960 1980 2000 2015 2017

kWh/kg Al (left) % improvement (right)

Source: International Aluminium Institute, Hydro analysis

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Smelter 4.0 vision – the autonomous smelter of the future

Karmøy technology pilot is step 1 towards the vision – control platform, connectivity and automation

Connected
Autonomous Connected Automated Automated
operator &
cells plants cranes transport
maintenance

Continuous sensor-
Connectivity Connectivity Sensors Safety
based measurements
Asset data management Remote operations Automation Autonomous vehicles
Artificial intelligence
Predictive maintenance Real-time optimisation Safety Fleet control
Big data
Augmented reality Big data Accuracy & logistics
Automation

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A world of infinite opportunities – in aluminium
Part of the solution and a building block of modern society

Transportation Packaging Infrastructure End-user applications

The path towards 1. Minimize energy consumption and carbon footprint in upstream production
‘The Green Shift’ 2. Maximize use-phase benefits in applications where the light-weight metal saves energy and emissions
and sustainability: 3. Bring back used aluminium into the loop for infinite recycling and reuse

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