The London Metal Exchange (LME) is planning to create a trading platform specifically designed for users who wish to source low-carbon aluminum — such as those operating in the transportation or packaging industries.
In the primary aluminum industry, low carbon aluminum is typically determined as being aluminum produced using renewable energy sources, such as hydroelectricity, as well as implementing advanced low-energy consumption technologies.
In addition, the exchange is also looking into launching a contract for scrap aluminum. Recycling aluminum takes up to 95% less energy than primary aluminum production.
The LME has made sustainability a focus of its trading platform over the past couple of years. In October 2019, the Exchange announced its responsible sourcing requirements across all its brands — following a formal market-wide consultation on proposals underpinned by the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance.
The LME hopes to introduce the requirements as soon as possible and has set forth a timetable, with full engagement required by 2022 and full compliance by 2023.
“The LME continues to engage actively with its stakeholders on sustainability issues – especially in the aluminum sector – and is committed to supporting initiatives that facilitate the global transition to a low-carbon economy,” stated the LME. “As an interim measure for its responsible sourcing requirements, the LME will require all brands to work towards ISO 14001 in respect of environmental management, as well as OHSAS 18001 for occupational health and safety.”
The LME has introduced a series of online webinars aimed at introducing the mining and metals industry to the new responsible sourcing requirements, discussing the fundamentals and practicalities.
The LME also recently partnered with the Aluminium Stewardship Initiative (ASI) to find areas of collaboration focusing on the ASI’s 2020-2021 revision of its standards in consideration of the LME’s Responsible Sourcing initiative — as well as ways for the LME to use data from ASI certification, metrics, and audits.