Major companies, including Ford, GM, Pepsi, Ball Corp., Rivian, SunPower and eight others, sent a letter to Department of Energy Secretary Jennifer Granholm requesting that funding from the Inflation Reduction Act be used to modernize and grow the clean aluminum industry.
The letter warns of a declining U.S. aluminum industry that faces spiking electricity prices and lack of access to low-cost renewable energy. As global aluminum demand is set to increase by 40% by 2030 and 80% by 2050, the companies argue that domestic production of clean aluminum is “essential to America’s economic growth.”
Companies included in the letter cite the need for domestically-produced, low-carbon primary aluminum in order to achieve their carbon neutrality goals. The aluminum industry currently relies heavily on fossil fuels, which has led to rising costs for U.S. aluminum smelters.
“Ball Corporation is working to cut more than half of the greenhouse gas emissions from operations and supply chains by 2030,” said Ramon Arratia, chief sustainability officer for the company. “As a significant buyer of aluminum can sheet, we’re using our purchasing power to help transform the aluminum beverage packaging sector to low-carbon primary aluminum and low-carbon recycled aluminum, but we can’t do it alone. The Biden administration has an opportunity right now to rapidly accelerate the decarbonization of primary aluminum refining and smelting in the U.S., and make America a global leader in producing clean aluminum.”
Power supply currently accounts for 40% of U.S. smelters’ total production costs, and the high cost has already led to decreased production in some states. Since the price of electricity from renewable sources has gone down in the last 10 years, renewable energy may keep aluminum smelters from being priced out.
The letter asks the federal government to secure low-cost electricity supply for these facilities in the short term along with investment in long-term supplies of affordable, clean energy.
A wide range of industries were represented by the companies included in the letter, from solar panel manufacturers to brewing companies. The versatility of clean aluminum offers the opportunity to contribute to decarbonization in a number of industries.
Aluminum is particularly important in the creation of clean energy technologies, including solar panels, wind turbines, heat pumps, and electric vehicles.
According to the letter, aluminum demand from wind and solar alone is expected to exceed all current aluminum production. Such significant expansion of aluminum manufacturing presents a major opportunity for emissions reductions. Aluminum production is currently responsible for 80% of emissions from the materials-producing industry, but clean aluminum technologies may allow for low carbon, or even carbon-free, manufacturing.
The International Energy Agency claims that the aluminum sector is currently off track of its pathway towards the Net Zero Emissions by 2050 scenario. According to the aluminum letter, this trend still has time to change, provided the DOE responds to the request to prioritize decarbonization of primary aluminum in its continued implementation of the IRA.
