A new emissions-linked freight agreement for shipment of aluminium

To guide our progress towards our long-term scope 3 goal, we are progressing near-term actions across three strategic areas, including partnering with customers and suppliers to support and co-design emissions reduction programs. 

Maritime freight represents approximately three per cent of our FY25 Scope 3 GHG emissions, and we continue to explore opportunities to manage and reduce these emissions. We recently finalised a new emissions-linked contract with MACS, a privately-owned vessel owner and operator, for shipment of aluminium ingots from our Hillside Aluminium smelter in Richards Bay, South Africa on certain routes. 

Freight charges under the one-year contract are linked to carbon dioxide emissions, essentially introducing a carbon price into the contract. The mechanism is similar to a Carbon Adjustment Factor, where MACS is paid a higher freight rate if shipping emissions are lower than an agreed baseline, and consequently MACS receives a lower freight rate if emissions are higher than the agreed baseline.  

This agreement is an example of the work we are doing across the business to reduce our greenhouse gas emissions across all scopes. 

Learn more about our approach to climate change here. 

Footnotes 

1. The use of this term in the context of climate change in this case study means an aspiration to deliver an outcome for which we have not identified a pathway for delivery, but for which efforts will be pursued towards achieving that outcome, subject to certain assumptions or conditions 

2. GHG emissions in the value chain. Scope 3 GHG emissions include those associated with upstream activities, such as embodied emissions in goods and services we use, and downstream activities such as the processing and end-use of our products by our customers.