Transparency in copper procurement: Südkupfer‘s Product Carbon Footprint Report

The high complexity in context of copper releases and tolling agreements was a real challenge in developing the report. In contrast to the traditional supply chain, in which the raw material is delivered directly from the supplier to the customer, in the tolling business may appear several upstream producers between us and the purchasing customer. The copper purchased from Südkupfer is generally not delivered directly to the customers, but is allocated to their upstream producers. The inflow of the material is documented on a so-called “copper account”. The upstream producer can either make the copper account balance available to another upstream supplier by releasing it from the account or have the copper physically delivered. This process can be continued as often as required. Tracing all releases and physical delivery processes are exclusively possible at the end of this chain by help of an IT-supported algorithm.

Südkupfer delivers copper cathodes to several upstream producers in the supply chain continuously. These copper cathodes originate from many different cathode producers who manufacture their own brand, so-called “copper cathode brands”. The cathode brands provide information of the origin and the quality of the cathode to the processor, for example. Some manufacturers publish information on the recycling content and PCF of the cathode brands on top. We went into this in more detail in last year’s story already. Südkupfer has to take additional factors into consideration when supplying cathodes: For quality reasons, some upstream suppliers require a ‘cathode mix’ defined for their production process. They use a brand list to determine which cathodes are accepted and which are nonaccepted.

The key figures regarding emission factors and the proportion of secondary material can vary greatly from cathode brand to cathode brand. In this context it is useful to have a look at the emission factors for copper cathodes published by the Federal Office of Economics and Export Control. It shows an average PCF of 6,658 kgCO2e/tonne of copper cathode¹. Another calculation for a global average value is published in a study by the International Copper Association (ICA). The result of the ICA-analysis is a value of 3,965 kgCO2e/tonne of copper cathode². The ICA’s figure is significantly lower, as the study was based exclusively on data from ICA members.

The ICA approach is more suitable for Südkupfer’s PCF reporting as our supplier base is well covered by the ICA. For cathode brands whose PCF has not yet been published or if the brand is unknown, our system takes the ICA average. For all other cathode brands, the PCF published by the cathode manufacturer is calculated. Our investigation resulted in an average PCF of 2,756 kgCO2e/tonne of copper cathode for 2022 regarding the copper cathodes purchased by Südkupfer during this period.

However, with our PCF report we intend to offer the highest level of transparency to our customers. We do not content ourselves with calculating and publishing just the average PCF, but track the PCF of each customer individually according to the releases made in the reporting quarter. Therefore, our customers receive a report on an average PCF and a recycling rate that reflects their individual supply chain per quarter. Depending on the release-practice of the customers or their upstream suppliers, the PCF and recycling rate can fluctuate quarterly.

The evaluation process starts with tracking which cathode-brands and volumes have been delivered by Südkupfer to the several cathode-processing upstream producers in the respective quarter. On this basis an average value can be calculated. In a second step, it is possible to track how much copper has been released by each customer from the upstream suppliers by tracing the customer’s release-orders in the relevant period. The average PCF and the average recycling rate are redistributed to customers depending on the quantity released then. An average value is calculated on this basis again. This process continues until all of the customer’s releases are mapped.

Thus, the physical supply chain of copper cathodes is pictured as accurately as possible. Our customers receive the PCF and the recycling rate of the copper that was delivered in their physical supply chain. We must point out that this procedure only covers the copper purchased by Südkupfer. Südkupfer has no influence on the PCF and recycling rate of the material that is used in fact by the upstream producer in its production process.

Some cathode manufacturers differentiate between regular and special copper cathodes. The special products have better characteristics in terms of CO2 footprint and recycling rate. A surcharge on the cathode premium must be paid for these special products generally. As a return service the customer receives a certificate attesting the purchase of a particularly ‘green’ cathode. The use of ‘green copper’ cathodes is not included in the calculation of Südkupfer’s PCF report. This is due to the customer receives the certificate from the manufacturer directly and the better values should benefit the buyer straight. That means that an average is announced for the regular cathodes and the buyer of ‘green copper’ cathodes can also offset the certified value of these special cathodes in a next step. This ensures that PCF and recycling rate of the ‘green copper’ cathodes have a direct impact on the buyer’s individual calculation.