Elkem achieves A rating from CDP, ranking among the world’s leading companies on climate transparency and action

Adaption to climate change and transition to more sustainable solutions will impact our business and financial conditions going forward. To mitigate these risks, Elkem is committed to ambitious targets and continuous improvements towards 2030 and beyond.

Ambitions and targets

Elkem’s ambition is to reduce the company’s fossil CO₂ footprint, by increasing the use of renewable carbon sources and development of innovative production processes. The company endorses the intention of the Paris agreement of limiting global warming to 1,5 degrees.

Elkem’s total direct fossil emissions in 2020 was 2.92 million tonnes of CO₂. More than 65% of the direct CO₂-emissions come from the production processes, where quartz react with carbon material to produce silicon and ferrosilicon. These emissions are mainly located in Norway and Iceland, and covered by the EU Emission Trading System (EU ETS).

Elkem has a number of ongoing activities to reduce its CO₂ footprint. These activities are mainly grouped in three main areas:

Elkems climate strategy.jpg

The emissions from our six Norwegian plants accounts for just over 50% of the total direct CO₂ emissions in the company, and it mainly originates from our smelting furnaces. Our target is that minimum 40 % of the direct CO₂ emissions from the Norwegian smelters will come from renewable and thus CO₂ neutral sources by 2030. Renewable reduction agents based on biocarbon is part of the natural carbon cycle. Increased use of biocarbon in Norway, will therefore have substantial effect on lowering the group’s total fossil CO₂ emissions as well as further fostering technology development on biocarbon.

Biocarbon must be used in a sustainable manner, financially and environmentally and social. The Elkem Paraguay plant, which has been constructed from the ground up for utilisation of biocarbon, has already demonstrated that the production process can utilise 100% biocarbon.

In order to replace fossil coal with renewable biogenic sources, such as charcoal and woodchips, the renewable sources must be produced in a sustainable and resource efficient way. Elkem has developed a new resource efficient, breakthrough technology for production of biocarbon and will build a pilot plant in Canada. We will ensure the use of best available technology and that the production is environmentally and socially certified as well as economically sustainable. In addition, we continue to improve our reporting on emissions throughout the value chain and identifying and implementing measures to support our reduction target. Elkem’s goal is to achieve carbon neutral metal production by 2050.

Responsibilities and risk management

The board of Elkem has the ultimate responsibility for climate-related issues, which is an integrated part of the business strategy. The board is actively engaged in Elkem’s climate strategy, target setting and measures for reducing the group’s CO₂ footprint. The board follows up and reviews the climate strategy on an annual basis as part of the group’s strategy process. The climate risk assessment is based on possible changes in regulations, customer preference, production technology, physical and market regulations.

The highest management level position of responsibility for climate-relates issues is the CFO. The CFO is responsible for managing the ESG Steering Committee. This is the corporate body with responsibility for climate-related issues and consists of members of the corporate management. The ESG steering committee reports to the CEO, who is the formal owner of Elkem's policy and procedures for climate-related topics.

Physical risks – chronic and acute

Elkem’s processes and plants are not deemed to be exposed to acute physical risks. Neither the location of the plants, nor the production processes are sensitive to acute flooding, drought, heat stress or wind. 

Water is important as input to silicones production and for power supply to the company’s smelters as well as for cooling purposes. Possible climate impact is therefore assessed as a part of our strategic planning processes.

As the progression of climate change continuous, acute risks might be more relevant for us in the future. Elkem’s physical assets or infrastructure assets could be destroyed or disrupted, leading to loss of functionality, decline in the services they provide or a rise in the cost of these services.

Elkem is implementing the framework of TCFD – Taskforce on Climate related Financial Disclosure in 2021 and will report according to the framework for the first time. Before implementing TCFD, Elkem has done some initial analysis of transitional risks for the company.  

Transitional risk

The transitional climate risks are mainly defined as strategy and operational risks. The strategic risks are mainly related to factors potentially impacting Elkem’s operations, available technology for reducing emissions, changes in regulations from authorities and changes in consumer preferences. Our direct operational risks are related to risks of major emissions or other incidents with negative impact on the environment which is integrated into a multi-disciplinary company-wide risk management process.

Some examples of transitional risks for Elkem:

Regulatory risks: The European Green Deal and Taxonomy, framework for sustainable raw materials, regional and national emission requirements, carbon pricing, environmental requirements in procurement, border fees and escalated trade wars.

Technical risks: Replace fossil coal with renewable biobased sources, waste and water management, digitalisation, positioning within strategic segments such as battery production, electrification of shipping and long-distance transport, circular economy efforts, new leap frogging technology.

Market risks: Restricted access to raw materials (biobased sources), affordable renewable energy, customer/consumer demand on lower CO₂ footprint and life cycle analysis, increased demand of recycled materials, waste management, adapt business model to new growth markets/segments.

Reputational risks: Transparency and disclosure on ESG issues, environmental conscious consumers demand lower footprint, process industry is seen/not seen as part of the green shift /future businesses.


Three of the key drivers for reducing future CO₂ emissions in Elkem's value chain are an increased availability of biocarbon, increased demand for green products (especially batteries), and the cost of CO2 emissions.

The price related to CO2 emissions is important for the entire processing industry. Increased costs must however be balanced against other regions with no or low CO₂ costs to avoid “carbon leakage” i.e. that production is moved to other regions with less favourable energy mix and even higher CO₂ emissions per unit. Increased availability of biocarbon is also important for Elkem, to reduce the use of fossil coal as reduction agent in the smelting processes. Elkem is working on breakthrough technology for production of sustainable biocarbon from wood waste. Increased demand for sustainable green products can also help to make climate measures in the industry profitable. For Elkem, an increased demand for electric transportation will drive demand for battery materials and silicones products for battery insultation and cabling.

The table below shows a simple consequence evaluation of the threats and opportunities identified:

Climate-related development

Current strength/weakness

Business-related risk/opportunity


Uncertainty around quota pricing, distribution of free quotas and compensation systems, primarily in Europe. However, this must be balanced against risk of carbon leakage in the global market.
No global agreement for "the polluter pays" / just regional carbon taxes.

High costs with high CO2 prices, if production is not changed. Having a strategy for phasing in biocoal reduces the risk for high carbon prices.


Lack of predictable access in Norway.
Competition for raw materials.
Access and documentation for sustainable raw materials (public opinion).
Focused innovative and research efforts on top quality biocarbon.
Technological challenges around the introduction of an increased percentage of biocarbon.
Demonstrated high quality of product by introducing biobased sources / reducing fossil sources.

Opportunity for emission-free, and possibly carbon-negative production improves competitiveness.
High demand can generate market pressures and a high price for charcoal / biomass.
The use of low-quality raw materials and flexibility in types of raw materials is a possibility.
Use of transparent sustainability criteria for biomass.


Production of renewable energy.
Use of biobased renewable sources.
Low CO2 emissions compared to competitors.
Produce products used in zero-emissions solutions (batteries, EV, solar cells, wind turbines) and become preferred in part due to low emissions in the value chain.

Good market position.
Need for documentation of products' GHG footprints (LCA & EPD).


Model inspired by Report 06/2018 How will we confront climate risk? By the Norwegian climate foundation (Norsk klimastiftelse) (p. 27.)