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“The [Department] has a set of tools through the Inflation Reduction Act [IRA] and the Bipartisan Infrastructure Law,” Annie Sartor, aluminum campaign director at clean industry advocate group Industrious Labs, said.
“They are open to talking about what the industry needs. When we said the current investments were not enough, they were open to conversation,” she added.
The attendees at the meeting with the Energy Department included industry advocates and leading aluminium consumers in the country, such as Ball Corp and Novelis, and auto makers GM, Rivian and Ford.
“Part of the meeting at the [Department] was about how to decarbonize aluminium [production in the US],” Will Giese, senior director of government affairs at solar thermal product manufacturer SunEarth, said.
It is difficult to find a US aluminium supplier that is both domestic and low carbon, according to Giese.
“For us, just like [electric vehicle] and solar panel producers, it is important that the process to produce the clean energy products we manufacture is clean itself,” Giese said.
SunEarth’s products fall under section 48 of US tax law, which offers energy credits for properties that use “solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat.”
Products that contain domestic materials also qualify for tax credits, “so it is a two-fold problem for us,” Giese said.
Aluminium consumers are concerned about lack of sufficient primary aluminium production in the US and are cognizant of their carbon footprint, so “they want to buy domestically and want it to be low carbon,” according to Sartor.
Because the majority of emissions for primary aluminium production comes from energy use, finding access to renewable, affordable power for primary aluminium production in the US is crucial but challenging, she said.
High energy costs have caused a number of US aluminium smelters to curtail operations or close doors.
According to an October 2022 Congressional Research Service report, primary aluminium smelters in the US operated at 55% capacity in 2021.
Currently, three companies – Alcoa, Century Aluminum and Magnitude 7 Metals – operate five primary aluminium smelters in the US. This is down from 12 companies operating 23 smelters in 2000.
The latest US smelter to close was Century Aluminum’s Hawesville smelter in Kentucky, which was idled in July 2022 due to soaring energy prices.
The smelter had been producing high-purity aluminium used in defense and aerospace industries.
The company also curtailed operations at its Mt. Holly smelter in South Carolina in 2021, after its power agreement with the local power authority ran out.
The company renewed its contract with the South Carolina Public Service Authority (Santee Cooper) in late October this year, allowing Century to maintain operations at current capacity.
“The Bipartisan Infrastructure Law and the IRA are a good step, but if the US wants to be a global leader in manufacturing, we need to get energy right. There needs to be a major investment in electricity and renewables, and it has to be invested strategically,” Sartor said.
On October 5, several companies — including the attendees of Wednesday’s meeting — sent a letter to the Department of Energy calling for investments from the IRA and other recent federal policies to secure low-cost renewable energy for the remaining primary aluminum smelters in the country.
Fastmarkets launched two low-carbon aluminium differentials in the US on November 3 to meet the growing interest in the US for low-carbon aluminium units.
The monthly aluminium low-carbon differential P1020A, US Midwest and aluminium low-carbon differential for value-added product, US Midwest assessments were both trading at zero on the day of their launch.
To learn more about our expansion into the US low carbon aluminium market and for a forward-looking view of low carbon aluminium pricing, join our webinar Exploring the future of global low carbon aluminium pricing on 30 November at 16pm GMT/ 11am ET. Learn more.