September 22 2020

Hydro: the global and complete aluminium company

2

“…create a more viable society by developing natural resources into products and solutions in innovative and efficient ways”

Aluminium

– metal of the

future

Hydropower

– infinitely

renewable energy

Engaged in the

entire value chain

– R&D, innovation

and tailormade

solutions

Global reach,

local presence

114 years of

industrial

development

and responsibility

Involved and

engaged

35,000employees

150locations

40countries

Pioneer: 3 decades ofenvironmental reporting

Cut electrolysis emissions by

70% since 1990

Karmøy technology pilot

15% moreenergy efficient

Primary production:

70% based on

renewable power

Climate neutral by 2020

2030 Ambition: Cut CO2 emissions by 30%

4

-36%

-22%

But continued progress requires a technology shift

5

Investing in R&D for low- or zero-carbon technology toward 2050

Exploring different paths toward 2050:

• Carbon-free process

• Carbon Capture and Storage (CCS) Carbon Capture and Utilization (CCU)

• Biomass anodes

On the path to ZERO

- 1 to 1 rehabilitation of available

mined areas (ongoing)

- Utilise 10% of bauxite residue

output (2030)

Key

targets

towards

2030

Ongoing

support

projects

- Brazil-Norway Biodiversity

Research Consortium

- Bauxite residue rehabilitation

and dry stacking

- Increased water storage and

treatment at AlunorteIncreased water storage

and treatment at Alunorte

- Recycle 65% of spent pot lining (2030)

- 50% reduction in fossil fuel related, non-

GHG emissions (2030 on 2017 baseline)

Brazil-Norway Biodiveristy

Research Consortium

Empowering 500.000 people

with education and skills

development by end 2030

GOAL: The impact on people

“Hydro is committed to respecting and

promoting human rights of all individuals

potentially affected by our operations”-Hydro’s Code of Conduct

Assess and mitigaterisks to people

Obligations

Beyond

compliance

Closer to our local communities – building trust

Sustainable Barcarena Initiative

12 projects awarded, value 730K BRL

8

First call for proposals, 50+ applications evaluated

Human rights impact

assessment

Developing master plan to prioritize actions

Coalition for responsible businessCollaboration with businesses, trade unions, and other organizations to support a national binding human rights law for business in Norway.

Social projects10 programs and projects targeting education and

income generation

In 7 municipalities#16. 700 people reached 2018/19

Some social investments efforts during Covid19 are redirected towards humanitarian response

We succeed when the communites around us succeed

Community Response to COVID-19

Collaboration with local authorities

Information and awareness

Donations of funds, property, mineral water, food, test kits, PPE

Social responsibility

Empowering 500,000 people with education and skills by 2030

2018 2030

Partnership with UNICEF signed

Stakeholder engagement

200+ stakeholder dialogues in 2019

Work with education and skills development for children and

adolescens

Fuel source most important differentiator

9Source: CRU, IAI, Hydro Analysis

0

5

10

15

20

Direct Indirect

Coal

Gas

Renewables

10

0

5

20

10

15

Global Average

3

Hydro Smelters Norway

15

0

Casting

Electrolysis power (scope 2)

Bauxite

Alumina

Anode

Electrolysis process (scope 1)

CO2e emissions from primary aluminium full value chain

Tonnes CO2/tonne aluminium, 2019

CO2e emissions from primary aluminium production

Tonnes CO2/tonne aluminium, 2020

Aluminium CO2 footprint by origin

kg CO2e

/kg Al

5

0

10

15

20

5.76.7

2.34.0

8.6

16.5

4.0

15.0

0.5

100% Post

Consumer

Circal 75R

75% Post

Consumer

REDUXA

4.0

Primary

extrusion

ingots

Europe

Primary

produced in

Europe

average

Primary

consumed

in Europe

average

Primary

Global

average

Primary

China

15.0 – 19.0

Greener products: From REDUXA 4.0 to 2.0

From REDUXA 4.0 Towards REDUXA 2.0 by 2030

3.4

–4

.0 k

g C

O2

e/k

g A

I

Other

<0.6

Casting

0.1

Smelting

1.6

Power generation

0.1

Anode

0.2

Alumina

1.3

Bauxite

0.1

Typical production values

2.0

kg

CO

2e

/kg

AI

PCS

-0.3Casting

0.1

Smelting

1.4

Power generation

0.1

Anode

0.2

Alumina

0.4

Bauxite

0.1

Potential production values

New energy mix in Alunorte important enabler to reach 2.0

11

Growing demand for Hydro’s greener facade solutions

12

60 Hydro CIRCAL-project for 250 MNOK in 16 countries during 1 year

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2019 2020 2021

Sales volume Hydro CIRCAL

Sales volume tonnes

Økern Portal, Norway

Ticon, Norway HELL energy drinks

A car made of 100% recycled material would have~85% reduced CO2 footprint

13

3 439

400

2 926

421

62

114

366

84

158

Ferrous metals

Polymer

Aluminium

Copper

Elastomer

Glass

Other metals

Magnesium

Other materials

(incl. liquids)

Sum 7 971

83%

CO2 breakdown (virgin material)

(XC60 ICE example) kg

573

1 038

67

146

70

62

19

61

14

26

Glass

Copper

Ferrous metals

Elastomer

Polymer

Magnesium

Other materials

(incl. liquids)

Aluminium

Sum

Other metals

CO2 breakdown (recycled material)

(XC60 ICE example) kg

Source: Volvo Cars, GABI GWP factors, Material Economics

Pre-requisites

Sufficient market for high-

quality recycled material,

primarily when it comes to

metals and plastics

An opportunity for the Automotive OEMs to drastically reduce the CO2 footprint of producing a car

Volvo Global Average: 12 kg CO2 / kg AlEI Hydro European Average: 5.7 kg CO2 / kg AlREDUXA 4.0: 4.0 kg CO2 / kg AlCIRCAL 75R: 2.3 kg CO2 / kg Al

The Volvo case – total CO2 emissions from producing a car would be 30% lower with 75R

EI Hydro European Average

VolvoAverageGlobal

49%

REDUXA 4.0 CIRCAL 75R

6 109

7 971

6 561

5 657

-18% -23% -30%

Aluminium All other materials

Operating within a changing regulatory environment

• Continuation of CO2 indirect cost compensation fundamental to securing cost competitiveness of aluminium in global markets

• CBAM alone – without additional carbon leakage measures such as CO2 compensation – unlikely to mitigate carbon leakage risk and affect aluminums’ global competitiveness

Carbon border adjustment

measure (CBAM)

CO2 indirect compensation

Two key carbon leakage measures…

V

…which have implications for Hydro and

aluminium

16

Growing Hydro’s renewable

business: Becoming a wind park

operator in Norway

Sourcing platform for fully-owned smelters, Norway1)

TWh

0

2

4

6

8

10

12

14

16

18

20

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

Current captive RSK volumes Statkraft 6.4 TWhHydropower Wind power OtherTotal consumption

2030 ambition: roadmap to cut CO2e emissions by 30%

Ambition to reduce own emissions by 10% in 2025, 30% by 2030

Exploring different paths

• Carbon capture

• Biomass anodes

• Carbon-free process

Innovation and technology development key enablers toward CO2-free processes

* Based on 2018 portfolio

Greener energy mix at Alunorte: Key enabler for new climate and environment ambitions

R&D for low- or zero-carbon technology towards 2050