Embodied energy trade: How it works

Why ships carry smelted metal instead of electricity

Instead of moving energy itself, the world often moves products that took a lot of energy to make: aluminium smelted with cheap hydropower or gas, iron reduced with hydrogen, ammonia made from gas or renewable hydrogen, food, and computing done in data centres where power is cheap. Natural media (sunlight in light pipes, wind on sails, river and ocean currents) also carry energy without fuel.

Step by step

1. Find stranded cheap energySome places have more energy than they can use or export: Iceland's hydro and geothermal power, Gulf gas, remote solar and wind. Moving that energy as electricity or gas over oceans is expensive or impossible.
2. Put it into a productAn aluminium smelter uses about 14 MWh of electricity per tonne of metal (global average about 14.1 MWh). In Iceland, power-intensive industry used about 78% of the electricity consumed in 2019, and aluminium smelters alone about 66% (calculated from 12,490 of 18,958 GWh).
3. Ship the productThe metal, iron briquettes or ammonia travel on ordinary bulk ships and tankers. Hot briquetted iron (HBI) is pressed while hot so it does not re-oxidise or catch fire in transit.
4. Use it where demand isThe importer receives the result of the energy (metal, fertiliser, a computation) without building power plants. Ammonia used directly as fertiliser or feedstock needs no conversion back to hydrogen.
5. Move bits, not wattsA data centre in a cold, cheap-power region sends results over subsea fibre instead of importing power. The extra delay of a few tens of milliseconds is acceptable for most computing, though not for latency-critical uses such as high-frequency trading.
6. Use natural mediaLight pipes bounce sunlight down a mirrored tube; rotor sails and wing sails let wind push ships; rivers and currents have long carried barges and rafts downstream.

The science

A product embodies energy in two ways. Some is chemical and partly recoverable (ammonia and hydrogen still hold fuel energy). Most is spent irreversibly in breaking strong chemical bonds, such as pulling oxygen off aluminium or iron, and cannot be got back, but the importer avoids having to spend it. A tonne of primary aluminium contains about 51 GJ of smelting electricity (calculated from 14.1 MWh) and about 186 GJ of primary energy across the whole chain from mine to cast house (IAI, 2019, including power-station losses), while carrying it 10,000 km by bulk carrier burns roughly 0.6 to 1.0 GJ of fuel (calculated). The product is therefore a very dense energy carrier.

The engineering

Smelters need firm, round-the-clock power, so they sit next to hydro dams, geothermal fields or gas and coal plants under long contracts. Green iron uses hydrogen-based direct reduction plants near renewables and high-grade ore, then hot briquetting. Ammonia is shipped refrigerated in gas carriers; over 120 ports already have ammonia infrastructure. Data centres need grid connections, fibre and cooling; cold climates give free cooling. Light pipes use mirror films of 95 to 99.7% reflectivity (manufacturer data).

Key numbers

Sources

1. Primary Aluminium Production statistics (2025 annual totals as reported by Mysteel, 27 January 2026) International Aluminium Institute, 2026
2. Factsheet: Aluminium smelting with use of low-carbon electricity GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit), 2025
3. Raforkunotkun á Íslandi 2019 (Electricity consumption in Iceland 2019) Orkustofnun (National Energy Authority of Iceland), 2021
4. Global Hydrogen Trade to Meet the 1.5 C Climate Goal: Technology Review of Hydrogen Carriers IRENA, 2022
5. Energy: facts and figures FAO, 2025
6. Energy and AI: Executive summary IEA, 2025
7. Aluminium recycling saves 95% of the energy needed for primary aluminium production International Aluminium Institute, 2021