Musings, politics and environmental issues

The PCC silicon smelter at Bakki, North Iceland, is asking its owners and other investors, such as pension funds, for up to 5 billion kronur (almost $US 40 million) to provide a firmer base for its operations. The majority of the money is expected to come from the holding company of the PCC Group, PCC SE, which has an 86.5% share in the Bakki smelter. Pension funds currently have a 13.5% share in the silicon smelter. PCC SE already provided extra funds last year in the form of a shareholder loan, totalling $US 34 million.

Although PCC SE proudly states: “In the north of Iceland we have constructed one of the world’s most advanced and most environmentally compatible facilities for silicon metal production which was commissioned in 2018”, it has in fact suffered innumerable problems and has frequently, if not usually, operated at reduced capacity due to various problems.

Just this week, the first furnace had to be switched off due to a leak in the cooling system, which led to melting of part of the electrode (þrýstiklemma in Icelandic).  A new part has to be ordered. Note that the PCC website gives very little information about the plant’s problems.

Besides operating problems, the market price of silicon metal has been decreasing recently.

News of PCC’s financial problems must surely make it harder for Stakksberg to sell the former United Silicon plant in Helguvik, Southwest Iceland.

 

 

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According to a new report published by the Nordic Council of Ministers (NCM), emphasis should be put on developing and implementing circular design principles into electrical and electronic equipment (EEE) as 80% of environmental pollution and 90% of manufacturing costs are the result of decisions made at the product design stage.

Using recycled plastic in an electrical/electronic product could reduce the environmental impact of a single product by over 20%, they say, while up to 50% of the 1.2 million tonnes of waste electrical and electronic equipment (WEEE) plastics in the EU could be recycled instead of the current 20%. If all WEEE plastics in Europe were recycled, estimated CO2 emission reductions would account for over 2.5 million tonnes per year.

The authors suggest targets for circular electrical and electronic equipment (CEEE) akin to those in the EU plastics strategy, which stipulates 50% recycled plastic content in packaging material by 2025 and 55% by 2030.

Sector-wide circular design principles can be achieved by setting up a roundtable that brings companies and value-chain actors together, whereby both parties could learn from each other. The authors point out that incorrect markings on plastics have resulted in a situation where recyclers do not trust the markings on plastics, which means that different types of plastics are not separated even when technologically possible.

They say that ultimately, the goal should be to design and set up a system that enables circulation, i.e. taking products back and reprocessing material back to the same product over and over again. At the moment, the focus is on recycling valuable metals, “but as the world is moving towards circularity and the amount of EEE is growing fast, plastics need to be used in a more circular fashion”.

In terms of legislation, requirements for using recycled content would speed up the market transition towards circularity. Requirements for circular design principles – especially reparability, upgradability, modularity and ease of disassembly (RUMED) – could be first encouraged in the form of sector-wide principles and gradually formulated into requirements. Removing existing barriers, such as transporting e-waste across borders within the EU, is equally important.

Note that I originally wrote this up for ENDS Europe Daily, but articles there can only be accessed by subscribers.

Aluminium companies in Iceland have not been doing too well recently. The original smelter just outside the capital at Straumsvik, which was opened 50 years ago and is now owned by multinational Rio Tinto but is up for sale, had an “incident” 10 days ago when an arc flash formed within one of its pots. Luckily, it happened at a time when no one was present in the room, as otherwise it could have been fatal.

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For safety reasons, all of the 160 pots in that pot room have been switched off – this represents about a third of the smelter’s production and represents a serious dent in the company’s operations. Last year, the company made a loss of about $US 41.3 million, so this setback doesn’t help – and won’t make the smelter easier to sell either.

Don’t bother looking for information about the incident on the company’s Facebook page or their website, as it isn’t there!

What has sparked my curiosity is that both the CEO of  East Iceland Fjardaal aluminium smelter, Magnus Thor Guðmundsson, and the Icelandic Senior Vice-President of Alcoa globally, Tomas Mar Sigurdsson, have announced their resignations very recently. Tomas Mar started off at the Icelandic plant before becoming involved with Alcoa Europe. He only became Senior Vice-President in November last year – not long ago.

Magnus Thor has been in various positions of responsibility within the East Iceland plant.

So is it coincidence that both decided to leave at a similar time? Well, the mother company’s finances have not been good. In the first quarter of 2019, Alcoa corporation announced a loss of $US 199 million while the second quarter loss was $US 402 million. So possibly they sensed that something was coming.

Alcoa, however, always add a paragraph about “forward-looking statements” to their annual reports, which presumably prevents them from being sued. This term seems to be American in origin but I suspect can be used in a variety of industries. Check out this explanation that they give:

Forward-looking statements include those containing such words as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” or other words of similar meaning.

This concept is interesting in itself and can surely be applied to many companies who want to be somewhat ambiguous in their intentions.

The third aluminium company, Nordural, is owned by Century Aluminium and located at Grundartangi in West Iceland. Unlike the other smelters, this plant was operated with a profit of just over $US 94 million, though profits were down on the previous year by nearly $US 25 million.

Heavy industry in Iceland accounts for 82-83% all electricity produced. The Fjardaal smelter is the biggest user, and is responsible for 34% of the country’s electricity usage (and pays the lowest cost for it of all three smelters). Rio Tinto is responsible for 23% of electricity used and the Nordural plant uses 12%. Other heavy industry accounts for the rest.

 

The U.S. military left their military base in Iceland in September 2006. With that, the last vestiges of a military presence in Iceland disappeared, as Iceland does not have an army of its own.

But since 2016 (if not before) the American military has surreptitiously been carrying out various activities in the security zone of the former base, including submarine surveillance. And that same year, the U.S. military asked the State Treasury for more finance for submarine monitoring and other projects.

More details have emerged from time to time about this funding, and I wrote about it in an article and a blog. At the same time, there has been daily military presence at the former base.

Now it has emerged (Icelanders can read about it here) that the U.S. military want to set up basic facilities for about 1000 military personnel in the security zone, along with a zone with appropriate facilities where planes carrying “dangerous goods”, such as bombs and fuel, could land.

Why? It sounds very suspicious to me.

A friend in the U.S. warned me last year that Iceland would have to be careful that the U.S. did not start using the situation for “quiet back-room deals”

In 2016 I published an article that indicated, amongst other things, renewed military presence in Iceland.

Here is part of what I wrote:

… earlier this year (2016), the U.S. requested the use of a hangar for submarine monitoring, so they could fly over the sea and detect submarines using sonar.

Then in June the U.S. Department of Defense met with the Icelandic Foreign Affairs Minister, Lilja Alfredsdottir, about wanting to strengthen cooperation with the U.S. military once more, because the security situation had changed since 2006.

Then in July 2016, the Center for Strategic and International Studies (CSIS) published a report in which they openly suggest: “NATO can optimize its ASW [anti-submarine warfare] posture to ensure that the right capabilities are in the right places at the right time by reopening Keflavik Naval Air Station in Iceland and encouraging Norway to reclaim and reopen its submarine support facility at Olavsvern.”

The same article also details various activities related to the NATO agreement which are permitted.

Note that the CSIS link no longer works, and that Lilja Alfredsdottir is now Education Minister; Gudlaugur Thor Thordarson is now the Foreign Affairs Minister. I don’t know anything about Olavsvern, though I just found this article which again is based on the CSIS report.

Katrin Jakobsdottir, Iceland’s Left-Green Prime Minister whose party is opposed to NATO and military operations in general, says that the decisions were made before she became PM and she cannot do anything about it.

Nevertheless, many people are unhappy about the situation.

 

 

 

Two prospective new airlines have surfaced over the last few days in Iceland, which both intend to pick up the pieces from the now-defunct WOW Air and offer low-cost flights from Iceland to Europe and the US.

The first to be announced has the tentative working name of WAB – We are Back – and intends to fly to 14 US and European cities. Two ex-WOW executives are involved, and funding is mostly being provided by an Irish investment fund, Avianta Capital, which is owned by the daughter of one of the owners of Ryan Air, Aislinn Whittley-Ryan. You can read more about it here.

Then last night it was announced that a US company had bought most of what’s left of WOW Air, and had also requested to use the hangars previously used for WOW planes. Initially the name of the company was not revealed, but now it turns out that the company is probably Oasis Aviation Services. Like WAB, the idea is to run a low-cost airline.

Oasis specializes in transporting weapons from the US to Africa through its hub in Djibouti. Not nice! Their website calls it “Internationalist Air Cargo – Specialist in US Military Cargo”.

Oasis is owned by Michele Ballarin, a wealthy woman with links to Somalia who is also known there as Amira Ballarin, meaning Princess Ballarin. Besides breeding Lippizaner horses there, she has also been involved in many other activities, to various degrees of legality. You can read about her activities here.

Since WOW stopped flying at the end of March, tourist numbers have dropped dramatically – which is not surprising, as most people would have booked their summer holidays by then and those who had booked flights to Iceland with WOW would have had to rebook with another airline. With limited seat availability compared to the number who wanted to come, flight prices increased phenomenally and no doubt became out of reach for the average traveller. Tourist operators are worried.

Whether both airlines will eventually be flying to and from Iceland remains to be seen – I personally doubt that the market can support both of them  – but I would much prefer WAB to the Oasis lot.

Update 7 September: It was announced yesterday that Ballarin’s lot will start flying from October to the USA (Washington Dulles airport), under the trade name WOW. Later they will fly to other cities.

 

 

Well, as some of the workers at the whaling station in Iceland intimated last year, Kristjan Loftsson has decided not to kill fin whales this year. One excuse given was somewhat feeble – they received permission to kill whales too late and it was thus too late to organise everything – but the main reason was that they couldn’t sell the meat that they’d sent to Japan.

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The minke whalers have also decided to hunt for sea cucumbers rather than whales this year, apparently “because it suits us better”. They abandoned whaling last year early on in the season. They will import minke whale meat from Norway this year to meet customer requirements. Is anyone protesting whaling in Norway?

This is the first time in 17 years that no whaling of any kind will be happening in Iceland.

Neither Kristjan Loftsson’s company Hvalur hf. nor the minke whale outfit IP-utgerd have excluded the possibility of whaling next year.  But this year at least the whales are safe.

The decision by the two companies provides even more rationale for the fact that the report commissioned by the Icelandic government on whaling was not accurate. The authors said that both minke whaling and fin whaling should be profitable, although they acknowledged that fin whaling wasn’t profitable between and including 2014 and 2017, much of the proceeds going on wages and transport to Japan.

And the minke whalers only caught 17 and 6 minke whales in 2017 and 2018 respectively, which can hardly be profitable. Indeed, the minke whaling company has gone bust more than once.

Some whales are not safe, though. Japan started commercial whaling this morning for the first time in 31 years, with quotas for 52 minke whales, 25 sei whales and 15 Bryde’s whales – 225 whales in total. Some whales have already been caught. According to a report in Japan Times, “the quota was calculated on the basis that it would not adversely impact stocks even if Japan kept hunting the whales for 100 years”. Good grief! 100 years!!!

They intend to kill the whales in nearby waters and in their exclusive economic zone but not in the Antarctic, where they have actually killed more whales annually than are allowed now. Last year, Nanami Kurasawa from the Japanese group IKAN told me that the stopping of “research whaling” in the Antarctic and Southern Hemisphere would mean that Japan would have to give up 333 minke whales from Antarctica, 134 sei whales and 43 minke whales from the North West Pacific. Distributors were worried, she said.

Nevertheless, whale meat consumption in Japan has dropped from over 200,000 tonnes in the 1960s to around 5,000 tonnes last year.

Iceland’s four largest CO2 emitters, three of which are aluminium smelters and the other a ferro-silicon plant, have signed a Letter of Intent with the Icelandic government to look for ways to become carbon neutral by 2040. The PCC silicon metal smelter at Bakki, which is another large emitter, is also expected to sign – “although our first priority is to get the operation running properly,” according to the environmental officer there.

The aim is to thoroughly investigate whether the CarbFix method for storing CO2 can become a viable option, both technically and financially, for storing CO2 emissions from these companies.

CarbFix was set up originally in 2007 in conjunction with the Hellisheidi geothermal power station, where CO2 is captured from steam and dissolved in water at pressure. The water is then injected into underground basalt rock at a depth of 500-800 m, where it forms carbonate minerals such as calcite within a few years. These carbonate minerals are stable on a geological time-scale.

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Annual capacity at the Hellisheidi plant is around 12,000 tonnes CO2, which accounts for about a third of the plant’s CO2 emissions. The Hellisheidi plant also removes hydrogen sulphide (H2S) from the steam, but this will not be an issue with the companies intending to become carbon-neutral by 2040.

In 2017, a pilot-scale Direct Air Capture unit was added to the system: this process is independent of location as it mostly relies on energy in the form of heat, which is available as a by-product in numerous industrial processes. Unfortunately the technique is currently too expensive to be used  for making heavy industry climate-neutral.

The project with heavy industry, which is expected to span five to ten years, will involve analysing the concentration of CO2 in emissions, so that similar removal techniques can be applied to those at Hellisheidi. The next step will involve design and manufacture of experimental equipment for capturing and injecting CO2, followed by design and manufacture of similar equipment on a larger scale.

The standard method of carbon capture and storage (CCS) involves pumping oil into old gas fields or using some form of carbon capture and usage (CCU). Edda Sif Aradóttir, who is project manager of CarbFix, says there are both advantages and disadvantages to traditional methods.

“The CarbFix method transforms CO2 into minerals within two years through a chemical process that happens naturally in nature, while traditional methods store CO2 in gas or liquid form. The procedure is thus of a completely different nature and CO2 is permanently removed,” she says.

She says that the main disadvantage is that it requires a considerable amount of water to dissolve the CO2 where chemical changes occur between water and rock. “On the other hand, the water needed by the procedure may be reused, which we in fact do up at Hellisheidi … we are working at developing the process even more so that seawater can be used,” she explained.

Funding for the CarbFix2 project has come from various programmes within the EU, including Horizon 2020, with collaborators in Toulouse, Barcelona and Zurich. CarbFix2 is designed to move the project on from a demonstration phase to one which will lead to an economically viable, complete CCS chain that can be used within Europe and globally.

Future research involves exporting the method to new injection sites in Germany, Italy and Turkey as well as Iceland, and further developing the method so it can be used offshore for permanent mineral storage of CO2 on the sub-sea floor. CarbFix proponents say that there is far more storage available in porous sub-marine basalts than required for the geologic storage of all the anthropogenic CO2 that will ever be produced.

I also wrote about this for ENDS Europe Daily today.