Australia Pledges $1.24 Billion to Support Green Aluminium Transition

Australia Aluminium

Government Incentives to Drive Low-Carbon Aluminium Production

Australia has announced a A$2 billion ($1.24 billion) production credit program to help aluminium smelters transition to renewable energy over the next decade. This initiative aligns with the country's broader goal of sourcing 82% of its power from renewable sources by 2030, up from approximately 40% today. The government has committed A$40 billion in total to support this transition.

The plan will provide financial incentives per tonne of low-carbon aluminium produced, encouraging smelters to invest in clean energy solutions. This move strengthens Australia's position as a key player in the global aluminium market, which increasingly demands low-emission metals for industries such as electric vehicles, aerospace, and construction.

Rio Tinto and Industry Leaders Back the Initiative

The announcement has received strong support from Rio Tinto, one of the world's largest aluminium producers. The UK-Australian mining giant stated that the initiative will "help sustain and grow aluminium smelting in Australia." This follows Rio Tinto’s existing partnership with the Queensland state government to transition its Boyne smelter to renewable energy sources.

Additionally, industry groups such as the Australian Aluminium Council and the Australian Conservation Council have welcomed the program. They believe it will attract private investment, enhance global competitiveness, and position Australia as a leader in sustainable aluminium production.

Concerns Over Renewable Energy Supply

However, the Australian opposition leader, Liberal Party head Peter Dutton, has expressed skepticism. He argues that Australia lacks sufficient renewable energy to power all its aluminium smelters. Critics also warn that the shift could lead to higher electricity prices, potentially affecting industry profitability and consumer costs.

Despite these concerns, the government remains committed to supporting green industrial transformation, ensuring Australia’s aluminium sector remains globally competitive while aligning with climate targets.