Albanese government promises $2 billion for new ‘green aluminium’ sector

Federal Labor will offer billions of dollars in production credits to support a new “green aluminium” sector, in a new election pitch to be delivered on Monday.
The prime minister will visit the Tomago Aluminium smelter to announce the new policy, in the politically-critical Hunter region of New South Wales.
The production credits would see aluminium producers paid for every tonne of “green aluminium” they make, similar to Labor’s existing policies regarding solar panels, green hydrogen and critical minerals.
$2 billion would be offered to aluminium smelters for each tonne produced using renewable electricity before 2036.
Aluminium smelters are extremely energy-intensive, requiring massive volumes of electricity to operate.
Tomago Aluminium is the country’s largest single user of electricity, and electricity makes up about 40 per cent of the smelter’s costs.
Making “green” aluminium would require smelters like Tomago to use only renewable energy in the aluminium-production process.
Tomago had aimed to move to fully renewable power before the end of the decade, but the company has recently voiced some doubts around that timeline.
Prime Minister Anthony Albanese said the production credits are vital for Australia’s manufacturing sector.
“Investing in the Australian-made aluminium industry is a massive opportunity — to create well-paid jobs in our regions and suburbs, and set Australia up for the future.
“We’ve got the resources, the workers, and the know-how — the only thing we don’t have is time to waste.
“We are building Australia’s future, not taking Australia backwards.”
Aluminium sector had lobbied for support
Australia’s aluminium sector had been calling for production credits to help support the industry, arguing its future was at risk.
It had pointed to the support in place for green hydrogen and critical minerals as a model that would work.
There are four aluminium smelters operating around the country in NSW, Queensland, Victoria and Tasmania.
Portland’s aluminium smelter is the largest consumer of electricity in Victoria. (Supplied: Alinta Energy)
Marghanita Johnson from the Australian Aluminium Council said it’s a welcome promise.
“Today’s announcement is an important step in support of the industry’s transition to the competitive, reliable, lower-carbon energy needed for the aluminium industry to secure a sustainable future,” she said.
“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 framework, over the right time-frame.”
The announcement is the latest in a string of major election commitments being made by Labor ahead of the formal election campaign, often in politically-important locations.
Opposition Leader Peter Dutton has also been in campaign-mode, using a rally speech on Sunday to commit to new small business tax breaks.
The Hunter region is currently Labor-held, but the Coalition is expected to try and flip more marginal seats like Paterson — which includes the Tomago smelter.
Labor has sought to argue the Coalition’s nuclear policy would threaten the aluminium sector, pointing to assumptions of lower power needs under the Coalition’s modelling.