By Fabiana Negrin Ochoa

Novelis Inc., one of the world's biggest aluminum recyclers, is investing $375 million in its aluminum plant in China to provide auto makers in Asia with low-carbon, sustainable aluminum.

The Atlanta, GA-based company said Friday the planned expansion includes the addition of a new recycling and casting center and will let it form closed-loop recycling partnerships with auto customers in Asia.

Closed-loop recycling refers to the process of repurposing a material or product indefinitely. Novelis, a subsidiary of Indian metals company Hindalco Industries Ltd. that counts Jaguar Land Rover and Ford Motor Co. among its customers, says the initiative would be the first automotive closed-loop recycling system in China, the world's largest car market.

Novelis plans to create a fully integrated supply chain for the auto market in China with its rolling and recycling facility in Zhenjiang and its automotive finishing plant in Changzhou. It aims to start work on the expansion early next year and finish by mid-2024.

The need for recyclable, less carbon-intensive metals is surging, as countries ramp up efforts to mitigate climate change. Novelis calculates that recycling aluminum requires 5% of the energy used to make primary aluminum and emits 5% of the associated greenhouse gases. To meet car makers' need for more sustainable materials, the company said it has ramped up global automotive capacity by 250% over the past three years.

Sachin Satpute, president of Novelis Asia, said the investment in Zhenjiang is needed to keep pace with demand, particularly from electric-vehicle producers, and aligns with the company's own sustainability goals, as well as those of China.

Beijing has said that it aims to be carbon neutral--meaning it offsets all the carbon it emits--by 2060. Novelis has pledged to reduce its carbon emissions 30% by 2026 and become carbon neutral by 2050.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

10-29-21 0437ET