Australia invests A$2bn to ‘supercharge’ green aluminium industry

AUSTRALIA’s energy-intensive aluminium producers are being urged to go green, with the government introducing a A$2bn (US$1.2bn) production credit to drive the shift towards cleaner practices.

Australia is the sixth largest producer of aluminium in the world, producing 1.6m t/y and operating four smelters, the largest of which is in Tomago, New South Wales.

Prime minister Anthony Albanese announced the investment in an interview in Tomago, highlighting the credit’s importance in securing Australia’s domestic supply chain and preserving jobs in regions dependent on the industry.

He said: “If there is a lesson from the pandemic, it's that Australia cannot continue to be just at the end of supply chains, be vulnerable as a national economy by not making things here.”

He added: “Increasingly, the world is looking to import clean, reliable metals like Australian-made aluminium. This represents a massive opportunity for growth and that's why today we're investing in Australia's aluminium industry.”

Green aluminium

The government plans to provide Australian smelter operators with a tax production incentive for every tonne of clean aluminium they make over ten years.

Aluminium production uses around 10% of Australia’s electricity production, and contributes 7% of the country’s emissions, according to 2021 data published by the Australian Aluminium Council.

The credit comes as part of the government’s Future Made in Australia plan, which is focused on attracting global investment to make Australia a leader in renewable energy. Around A$23bn has been allocated to renewables, skills training, and critical minerals development.

Australian climate organisation Climateworks Centre reports that Australia could reduce aluminium supply emissions by 98% by 2050 if renewable energy was used instead of coal.

Industry welcome

Mining giant Rio Tinto, which owns the Bell Bay aluminium smelter in Tasmania, welcomed the investment in green aluminium, with CEO Kellie Parker confirming it is working with the government to develop new smelter technology.

Parker said: “We will work with the New South Wales government now to know what the future could be. I certainly have done an enormous amount of work with Queensland as well, and this announcement really secures the future for Queensland.”

Australia’s Clean Energy Council also emphasised how important the investment will be for further supporting the country’s renewables sector.

Kane Thornton, CEO of the Council, said, “As the world’s second largest producer of both bauxite and alumina with the best access to solar and wind resources in the developed work, Australia is ideally positioned to be the long-term home of clean aluminium production.”

The credit scheme is due to begin in 2028, with the government hoping smelters will have fully transitioned to renewable energy by 2036.