Feds rule out renewable credits for Australia’s only “green” aluminium smelter

One of Australia’s four aluminium smelters, which is powered predominantly by renewable energy, isn’t eligible for a federal government green credit scheme. 

The confirmation raises further questions about the future of Tasmania’s Bell Bay Aluminium as it faces a fast-approaching deadline to lock in a long-term power contract.

The smelter in the state’s north employs more than 500 people and consumes about a quarter of the island’s power, which mostly comes from green sources. 

Labor’s federal MP for the region, Jess Teesdale, on Tuesday said the smelter would not be eligible for the $2 billion Green Aluminium Production Credit scheme.

The scheme is designed to provide support for “clean” production of aluminium over a decade. 

The smelter, owned by Rio Tinto, is in negotiations with the Tasmanian government and state-owned electricity provider Hydro Tasmania for a new 10-year power agreement.

Rio Tinto in 2025 agreed to a 12-month extension that expires on December 31 to allow time for the impact of the credit scheme to be known.

Federal industry minister Tim Ayres in 2025 said Bell Bay Aluminium would be eligible for the scheme, which starts in 2028/29.

However, Ms Teesdale told ABC Radio references by federal representatives to Bell Bay Aluminium were for it to be viewed by other smelters as “the pinnacle” of operations.

Tasmania’s resources minister Felix Ellis said the credit scheme exclusion was outrageous. 

“At a time of global smelter crises and when the federal government is putting billions of dollars into smelters of all kinds around Australia, we have the only green aluminium producer in the country,” he told reporters. 

“You know what they’re being offered by the federal government? Crickets.” 

Parties were working in good faith through negotiations to settle on a concessional power price and feedback from Rio Tinto had been positive, Mr Ellis said.

Tasmania is dealing with the recent closure of the nation’s only manganese smelter, also at Bell Bay, which employed more than 200 people. 

The federal government in June announced $105 million of extra funding to keep Nyrstar smelters in Hobart and South Australia operating until the end of 2026 while feasibility studies are undertaken.

Source: AAP