The Australian government has introduced the Green Aluminium Production Credit, a new initiative aimed at transforming the aluminium industry into one of the most environmentally friendly sectors globally. This program seeks to support aluminium smelters in the decarbonisation of their production processes, thereby facilitating the production of what is termed “green aluminium.”
Aluminium plays a vital role in modern infrastructure and clean energy technologies. However, its production is notoriously energy-intensive and contributes significantly to carbon emissions. In Australia, aluminium smelters account for more than 10% of a state’s electricity consumption and contribute between 3-4% of the nation’s total greenhouse gas emissions.
The Green Aluminium Production Credit will provide financial assistance to eligible Australian smelters, offsetting some costs related to the transition toward renewable energy sources. This initiative aligns with the government’s commitment to achieving a 2035 net zero target, which aims to reduce emissions to between 62-70% below 2005 levels.
Decarbonising the Aluminium Sector
The sector is prioritised under the Future Made in Australia National Interest Framework, recognising its potential to contribute significantly to a net-zero economy. Green aluminium is not only essential for construction but also plays a crucial role in the defence, transport, and electronics sectors. It is extensively used in renewable energy technologies, including solar panels, wind turbines, and transmission lines.
To qualify for the credit, smelters must demonstrate substantial reductions in carbon emissions before 2036. The credit will be payable per tonne of green aluminium produced and is set to last for up to 10 years or until 2044, whichever comes first. This long-term support underscores the government’s strategy to bolster the aluminium sector while meeting environmental objectives.
Consultation Process and Stakeholder Engagement
The government is currently in the consultation phase of the Green Aluminium Production Credit, seeking feedback from stakeholders to refine the program’s design and implementation. This outreach aims to ensure the final arrangements effectively support the aluminium sector while advancing environmental goals.
The initiative is poised to make a significant impact not only on the aluminium industry but also on broader efforts to decarbonise the Australian economy. As the world moves towards sustainability, the Green Aluminium Production Credit represents a critical step in positioning Australia as a leader in green technology and production.
