Annual and sustainability report 2021

In September 2021, Gränges successfully issued a five-year SEK 600 million senior unsecured Sustainability-Linked Bond under the company’s updated MTN programme. The new bond is due in 2026. Gränges has tied the Sustainability-Linked Bond to the achievement of three defined sustainability performance targets (SPTs), which all play a central role in Gränges’ sustainability strategy:

SPT 1: Reduce carbon emissions intensity from own operations and purchased energy (scope 1+2) by 25 per cent by 2025 compared to 2017 measures in tonnes CO2e/tonne. 

SPT 2: Reduce carbon emissions intensity from sourced metal inputs (scope 3) by 30 per cent by 2025 compared to 2017 measured in tonnes CO2e/tonne.

SPT 3: At least 30 per cent of total sourced metal inputs to be aluminium scrap by 2025. 

Gränges Konin is a producer of aluminium alloy flat-rolled products for various applications and has a strong market position in the packaging, automotive, construction and building industries. Gränges Konin conducts specialized research and innovation projects for the mentioned markets. Its R&I centre has a well-equipped laboratory and well qualified specialists for development of new materials. Since the acquisition, the team in Gränges Konin cooperates with the other R&I centres in Gränges to reach Group sustainability targets, to share know-how and to establish new joint R&I projects.

Main R&I projects
In recent years, Gränges Konin increased the production of sheet for the packaging and building industries and developed new aluminium-magnesium alloys. Several projects have been co-financed by the EU. Examples of projects:

• Development of technology for the production of open and closed shape profiles based on alloy entirely from the recycling of aluminium car parts.
• Implementation of innovative technology for the production of high magnesium containing aluminium alloy sheets and strips designed for stamping parts of car bodies and construction elements.
• Development and implementation of production technology for an innovative aluminium alloy for the production of high-pressure resistant closures in the packaging industry.
• Development of innovative and competitive materials based on a high amount of recycled content.

In 2021, Gränges and the aluminium and energy company Hydro joined forces to provide low-carbon and circular aluminium offerings to the automotive market. Through the partnership, Gränges sources low-carbon primary aluminium from Hydro. An increased use of aluminium in transport applications reduces the weight, energy consumption and carbon footprint of the vehicle as well as the range of electric vehicles when in use. It also contributes to improved resource efficiency in the product manufacturing process. Gränges and Hydro are both committed to pushing the boundaries for low-carbon and circular aluminium products and supporting the automotive industry to become more sustainable.

To promote responsible production, sourcing, and stewardship of aluminium across the aluminium industry, Gränges is a member of Aluminium Stewardship Initiative (ASI) which is a global non-profit standards setting organization which works to maximize the contribution of aluminium to a sustainable society. ASI offers two independent certification standards: the Performance Standard and the Chain of Custody (CoC) Standard, and Gränges’ target is that all sites by 2025 should have such ASI certifications in place. 

In 2021, Gränges had achieved two Performance Standard certifications (Shanghai and Finspång) and one CoC Standard certification (Finspång) and in January 2022, also Gränges Shanghai achieved certification in accordance with the CoC Standard.

The CoC Standard forms the basis for selling ASI-certified aluminium, which assures that Gränges’ products are responsibly sourced and produced across the entire supply chain, from extraction of raw materials to the finished product. Gränges uses the ASI certifications to provide assurance to its customers and other business partners that Gränges is committed to meeting their increased sustainability requirements and demand for sustainable aluminium. 

In 2021, Gränges’ plant in Huntingdon implemented a digital tool with the goal to maximize the utilization of assets leading to increased volumes at lower cost. It optimizes widths, thereby increasing metal recovery. The tool compiles the hundreds of different orders received and matches similar specifications together automatically. The algorithm decides how many coils for similar orders to produce to fulfill the order based on certain tolerances.

In Finspång, a tool using artificial intelligence was developed and implemented to predict the energy consumption in the facility’s two oxyfuel furnaces where aluminium is melted through combustion using propane and oxygen as fuel. The use of fossil fuels in the furnaces is the largest internal contributor to carbon emissions and Gränges Finspång has set a target to reduce energy consumption in these furnaces. The tool can in the future suggest the optimal settings to the operator to get the highest energy efficiency possible.

The tool will simulate the energy consumption in each of the two oxyfuel melting furnaces with the help of machine learning algorithm, which was trained on historical data from the melting furnaces to predict the 

energy efficiency based on a few input features such as weight, type of scrap, furnace temperatures, hatch opening time and other sensor data. The simulation tool is used to quantify how each parameter affects the energy efficiency. It will predict the energy consumption but also give feedback on the most important features, that is what parameter change will give the biggest energy saving.

One of the major benefits of using machine learning is that the model improves over time as it learns from the data – the more data, the better the model becomes. A traditional rule-based model would not learn and adapt over time in the same way as the machine learning model does. 

Knowing the profitability of the products is a cornerstone of any successful business strategy. Gränges Americas has developed a customer margin tool to gain insight into per-specification level profitability. This data-driven tool enables optimum pricing by product and increased response time to new customer specifications. It is updated monthly and combines 20 different data sources into one cohesive model to give the most accurate profitability information. The tool has been a key factor in transforming both how to understand the business and how to go to market. 

In 2021, Gränges Americas expanded its closed loop recycling programs with local foil and HVAC customers. In these programmes, customers’ process scrap from manufacturing is brought back and remelted into alloys sold back to the same customer. The materials are either transported back by Gränges or through a third-party recycling or freight company. Replacing volumes of primary aluminium with aluminium scrap has a clear positive effect on Gränges’ climate impact from sourced metal inputs (scope 3). Gränges Americas have been running such programmes since 2017 and in 2021, approximately 7,000 tons of aluminium scrap was recycled back from customers. 

In 2021, Gränges Konin conducted an inventory of heating and steam fittings to improve energy efficiency in its operations. Steam and heating installations are usually insulated only on straight sections of pipelines, elbows, or tees, and due to its surface, uninsulated fittings generate significant losses of heat energy. The inventory resulted in installation of insulating covers for elements of heating fittings, bringing expected energy saving of 700 MWh per year. 

In 2021, Gränges’ site in Huntingdon initiated a new programme focusing on improving machine guarding. Supervisors, engineers, and employees who work on the machines everyday conduct behavioral based audits that focus on machine guarding and to observe the work-stations. The purpose is to identify high-risk areas and address a solution and design that allows efficient work and at the same time eliminating risk of injuries. The facility has completed one slitter machine in 2021, and the plan is to complete all finishing equipment by 2022 and then progress on through the plant.