Following the passage of the historic Inflation Reduction Act (IRA) in 2022, the full weight of the US federal government’s financial heft is backing clean energy technologies and decarbonisation for the first time. As billions of dollars of public and private dollars begin rolling out in 2023, industries are ramping up supply chains as well as opening and expanding factories and manufacturing facilities in a bevy of states from coast to coast.

However, there’s a missing piece to this puzzle: aluminium. Thanks to its durability and versatility, primary aluminium is used to make everything from solar panels, to electric vehicles (EVs), to heat pumps, to transmission lines, and much more.

A relatively tiny amount of aluminium is currently made in the US – just three out of six total smelters are operating at full capacity, representing less than 1.5% of global aluminium production. With demand set to skyrocket as the energy transition accelerates, aluminium will be mission critical for a clean energy future.

A new coalition called the Sustainable Aluminum Network has launched this year to unlock this potential. One key strategy calls for using funding programmes included in the IRA to modernise and revitalise the US industry by upgrading facilities with new technologies that will increase efficiency and lower pollution, and create a robust supply chain of sustainable aluminium by 2030.

Because it is so lightweight, aluminium has been used in cars since the Model T Ford, and transportation uses 35% of all US aluminium. As we transition to EVs, aluminium is a critical material for extending their range by offsetting the weight of heavy batteries. Aluminium content in vehicles is expected to increase by 12% by 2026 alone, and as electric cars begin to be the standard, demand for aluminium will skyrocket.

Aluminium also accounts for 85% of components in solar panel frames and its lightweight, highly conductive nature is critical for transmission lines. In 2021, the power sector consumed 16% of US aluminium, and the World Bank projects that manufacturing solar panel systems will account for 87% of the energy tech demand for aluminium through 2050.  

Thanks to its durability and versatility, primary aluminium is used to make everything from solar panels, to electric vehicles, to heat pumps, to transmission lines, and much more.

Facing massive challenges  
Many of these growing uses of aluminium call for primary (newly manufactured) aluminium rather than secondary (recycled) aluminium. What does that mean? Well, we can’t recycle our way out of the problem. Primary aluminium is required for key materials in both clean energy production (such as solar panels) and transportation. While secondary aluminium requires less energy, some manufacturing requires specific alloys made in the primary process, so we need to clean up primary production.

The World Bank projects that manufacturing solar panel systems will account for 87% of the energy tech demand for aluminium through 2050 
Photo: Sustainable Aluminum Network

Despite primary aluminium’s importance in decarbonisation and a forecast surge in demand, the domestic industry in the US is currently struggling to stay afloat. The country’s aluminium industry has been hollowed out by decades of decline as foreign manufacturers, aided by cheap energy, took over the market. Three decades ago there were 23 aluminium smelters in the US; just six survive today, and only three are operating at full capacity.

The US aluminium industry’s decades-long decline has myriad reasons, but its current problems primarily relate to the cost of electricity, which makes up 40% of the total cost of production. Five out of the six US smelters run on electricity made with fossil fuel sources such as coal and gas, which have skyrocketed in price in the past 18 months. Companies that have ceased or curtailed their production in the past year have blamed the high cost of electricity.

As the US aluminium industry has declined, other countries have rushed in to fill the gap – particularly China, which now has 174 smelters. However, these facilities run mainly on coal and are now one of the largest sources of pollution on the planet. Relying on foreign production and supply chains also introduces national security risks. By reshoring US aluminium manufacturing using clean energy, the US could play a significant role in reducing global emissions from aluminium manufacturing.

Win-win solutions  
The IRA offers significant opportunities for aluminium, from driving demand for sustainable primary aluminium to the opportunity for aluminium companies themselves.

It is already having an impact on demand for aluminium. Thanks to billions of dollars in IRA funding made available last year, we’ve seen $103bn in EV investments, from manufacturing facilities to batteries, in 10 US states.

All of this growth in EVs and clean energy will require vast amounts of primary aluminium and contribute to the projected surge in demand. These sectors can continue to rely on aluminium imports, or they can address the embedded emissions in their product and stimulate growth of sustainable primary aluminium production in the US.

How we power our smelters can have the biggest overall impact on aluminium emissions. By repowering primary aluminium with renewable energy in place of fossil fuels, we can eliminate up to three-quarters of the total emissions from the production process. This is a win-win opportunity to simultaneously reduce pollution while reviving local communities, restore and grow good-paying jobs and ultimately unlock the US aluminium industry’s clean energy future

The advantage of this strategy is that the market-ready solution is something we understand well, and doesn’t rely on new technology or risky bets. Powering aluminium with clean energy is an easy win. One smelter operating at full capacity stands out as an example of what the future of US aluminium will look like: the Alcoa Massena smelter in New York, which runs on clean energy, primarily hydropower.

The IRA also has funding programmes available to upgrade the technology used in aluminium smelters, which are badly outdated in comparison to their European counterparts. Technologies that can lower pollution and increase efficiency are market-ready. For example, in Iceland, an aluminium smelter produces one-sixth of the level of emissions per the same tonne of aluminium as an American counterpart that is decades older. An interesting twist – both facilities are owned by the same company.

Reviving aluminium with federal funds  
Building a sustainable US aluminium industry has broad bipartisan support in key manufacturing states such as Indiana, Pennsylvania and Kentucky. A recent poll conducted by Sustainable Aluminum Network member Industrious Labs found that 70% of voters in these three states supported modernising aluminium manufacturing by investing in clean energy. The poll also found strong support for this across party lines.

‘In Indiana, aluminium manufacturing has been a key part of our economy, but it has historically caused a significant environmental burden because it relied on coal-fired power,’ says Ben Inskeep, Program Director at Citizens Action Coalition of Indiana, a network member. ‘With the new federal funding opportunities becoming available, we have a once-in-a-generation opportunity to modernise aluminium facilities and power them with affordable, clean energy solutions. Producing sustainable aluminium is critical for retaining and expanding these manufacturing jobs while powering forward our economy in an environmentally responsible manner.’

Coordination needed to achieve success  
At this moment of opportunity, the challenges presented to the industry are numerous: competition for funds; a lack of public understanding about the role of aluminium in the clean energy future; and coordination between the many interests, from communities to industry to government. This opportunity requires coordination, data analysis and broad public support.

Already, the US has missed one major opportunity to boost sustainable aluminium manufacturing. In Washington state in 2022, plans to re-open a shuttered smelter had the support of local labour unions, EV makers and a bipartisan state’s political leadership. The plans called for upgrading the smelter to greatly decrease its greenhouse gas (GHG) emissions – by at least 750,000 tonnes annually. Globally, another 4mn tonnes of GHGs would be prevented annually by supplanting imports of coal-fired aluminium from overseas. Re-opening the facility would have created 700 jobs.

However, the plant’s would-be operators couldn’t reach a deal on power supply and price with the local electricity provider, a federal agency. The plant remains closed.