The Australian Aluminium Council welcomes the Australian Government’s announcement of a production credit for the aluminum smelting sector as part of its Future Made in Australia plan. This marks a globally significant step towards securing the future of Australia’s aluminum industry and strengthening Australia’s role as a leader in the energy transition.
Aluminum Billet. Image Credit: Australian Aluminium Council
“Until now, we have seen many other countries take decisive action to support their domestic manufacturing industries while Australia has been less proactive in comparison,” the Council’s CEO, Marghanita Johnson, said. “Competitive energy is the critical foundation that enables Australian businesses to compete internationally. Today’s announcement is an important step in support of the industry’s transition to the competitive, reliable, lower-carbon energy needed for the aluminum industry to secure a sustainable future.”
Aluminum is fundamental to all aspects of modern life, from window frames in homes to food packaging, smartphones, and vehicles. It is also essential for defence applications such as military aircraft, armoured vehicles, and naval vessels, underscoring the need to retain a strong domestic supply of the metal, from mine to market.
What many Australians may not realize is aluminum also plays a critical role in renewable energy technologies, including solar panels, electric vehicles, and batteries. With global demand for aluminum projected to double by 2050 largely driven by the energy transition, Australia must act decisively to capitalise on its reserves of bauxite, alumina refining capacity, and aluminum smelting potential.
“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 frameworks, over the right timeframe” Ms Johnson said. “The announcement of A$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 aluminum market.”
Australia’s aluminum industry has long faced challenges including rising energy, labour, and capital costs, in parallel with protracted regulatory processes. The Australian Aluminium Council has consistently called for production credits for the aluminum sector to attract private capital and ensure the aluminum industry remains globally competitive. These new aluminum production credits should provide the some of the transitional support needed as Australia’s energy infrastructure and systems develop, and energy pricing returns to competitive levels. Today’s announcement lays the groundwork for:
- Access to reliable, lower-carbon energy at competitive prices;
- Support for capital investment in decarbonization technologies; and
- Predictable and streamlined regulatory approvals, needed to support this implementation, across the aluminum value chain.
“Australia is one of the few countries globally with the full aluminum value chain—bauxite mining, alumina refining, aluminum smelting, and extrusion—all undertaken domestically,” Ms Johnson said. “This policy supports not just resource extraction but also the transformation of those resources into high value finished products, creating more than 75,000 direct and indirect jobs, predominantly in regional Australia.”
Ms Johnson emphasized the industry’s history of innovation and resilience, adapting to market changes since its inception in 1955. “With the right industry and energy policy framework, the aluminum sector can continue to play a pivotal role in Australia’s economy and industrial landscape,” she said.
This policy represents a step towards securing a sustainable, innovative, and successful future for Australia’s aluminum industry for generations to come.