Australia’s aluminium industry is set to share in billions of dollars of investment to help it convert to renewable energy.
Prime Minister Anthony Albanese will on Monday unveil a green aluminium production credit scheme that will provide financial support to smelters changing their energy source before 2036.
As part of the $2 billion program, facilities will be eligible for support for every tonne of clean, Australian aluminium they make over a decade.
The production credits form part of the federal government’s signature manufacturing program, set to cost $22.7 billion.
Mr Albanese said the production credits for aluminium would allow for more products to be manufactured locally.
“Investing in the Australian-made aluminium industry is a massive opportunity – to create well-paid jobs in our regions and suburbs, and set Australia up for the future,” he said.
“We’ve got the resources, the workers, and the know-how – the only thing we don’t have is time to waste. We are building Australia’s future, not taking Australia backwards.”
It’s estimated revenue to GDP for the Australian aluminium industry will increase from $5.1 billion per year to $6 billion annually by 2050.
Australia is the sixth-largest producer of aluminium globally.
Industry Minister Ed Husic said the production credit scheme would help to boost aluminium jobs while also reducing emissions.
“With an entire aluminium supply chain uniquely located right here in Australia, we’re well positioned to capture the rewards of the global green energy transition,” he said.
“Communities and businesses rely on aluminium smelters, and we have an opportunity to partner with the private sector to support these secure well-paying jobs into the future.”
Rio Tinto chief executive, Australia, Kellie Parker said the move by federal Labor shows strong confidence in domestic manufacturing and the nation’s position in the global economy.
“As traditional energy sources for heavy industry become increasingly uncompetitive, today’s announcement is a critical piece in helping future-proof the industry. Such support is crucial for sustaining and growing regional economies,” Parker said.
“As global industrial customers and consumers increasingly focus on low-carbon products, this support signals Australia’s potential to be a major supplier of the aluminium needed for the global energy transition, creating a foundation for local businesses and manufacturing to thrive.”
Australian Aluminium Council chief executive Marghanita Johnson said the industry would be able to transition to renewable energy to make the sector sustainable for coming years.
“The natural advantages of our mineral reserves, renewable energy resources, and highly skilled workforce can give us a competitive edge, but only if supported by the right policy framework, over the right timeframe,” she said.
“The announcement of $2 billion in production credits for the sector represents a substantial step forward in the journey for Australia to position itself as a leader in the global aluminium market.”
The Australian Conservation Foundation welcomed the move to green up smelting – an energy-hungry activity that, when powered by fossil fuels, contributes significantly to the climate crisis.
“We welcome the Albanese government’s decision to back this vision for an aluminium sector powered by the wind and the sun,” said ACF climate and energy program manager Gavan McFadzean on Monday.
“Australia’s smelters are high emitters because most are powered by coal, making them uncompetitive in a low carbon global economy.
“Green aluminium exports have the potential to contribute to Australia’s economy for generations, unlike coal and gas exports that deliver very little for communities while damaging the climate.
“In Gladstone in central Queensland, ACF has worked with the local community to advocate for a transition pathway for heavy industry, including Rio Tinto’s Boyne Island smelter,” McFadzean said.
“There are many reasons to support the greening of metals in Australia including maintaining and growing manufacturing capability, supporting regional jobs and accelerating emissions reduction,” said Energy Users Association of Australia chief Andrew Richards.
“As the largest users of electricity in the country, the Green Aluminium Production Credit will also drive additional market demand for renewable energy.”
Bob Hawes, CEO of Business Hunter, says the credits will allow the aluminium smelter at Tomago in New South Wales to remain competitive in the global green metals market.
“This initiative will also have positive flow on effects and be of significant comfort to the range of support businesses that rely on Tomago Aluminium for their business.
“It has the potential to facilitate investment in new infrastructure and new processes, establishing and creating further business and employment opportunities for the Hunter region.”
Source: AAP with additional reporting from Sophie Vorrath
