The Australian government has announced a significant investment of A$2 billion ($1.24 billion) in production credits to support the transition of its aluminum smelting industry to renewable energy by 2036, reported Reuters.
According to the news agency, the initiative aims to transform one of the most carbon-intensive manufacturing processes into a greener alternative powered by solar, wind, or hydropower.
Currently, aluminum production in Australia is predominantly coal-powered, contributing significantly to global emissions.
The Reuters story said that the funding will benefit the country’s four aluminum smelters, operated by Rio Tinto and Alcoa. Under the plan, smelters will receive government support for each metric ton of low-carbon aluminum they produce.
Prime Minister Anthony Albanese emphasized the move as part of his administration’s broader commitment to renewable energy, a key issue ahead of a national election expected by May.
“We want Australian workers to make more things here,” Albanese said in a statement. “We have all the ingredients for a world-leading metals industry – abundant solar and wind resources, critical minerals, advanced facilities, and a highly skilled workforce.”
Australia has set an ambitious target of 82 percent of its electricity coming from renewable sources by 2030, though it remains at 40 percent currently. The government has committed over A$40 billion to new wind, solar and battery projects to close this gap.
The Australian Aluminum Council welcomed the announcement, describing the production credits as a crucial step to keeping the nation’s aluminum sector competitive globally. The country is the world’s sixth-largest producer of the metal.
“These new aluminum production credits should provide some of the transitional support needed as Australia’s energy infrastructure evolves and energy pricing returns to competitive levels,” said Marghanita Johnson, CEO of the Australian Aluminum Council.
The pledge underscores Australia’s drive to align its industrial practices with global decarbonization efforts, signaling a significant push toward sustainability in the metals sector.
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