Why Aluminium Smelters Are a Critical Component in Australian Decarbonisation

IEEFA, June 2020

“The full emergence of Australia as an energy superpower of the low-carbon world economy would encompass large-scale early-stage processing of Australian iron, aluminium and other minerals.”

As Ross Garnaut points out in Superpower, Australia has the potential to become a much more significant economic power in a decarbonised world. With abundant low-cost renewable energy sources, comparative advantage in the production of hydrogen, and huge deposits of minerals that form the basis of industrial production, Australia could lead the world in producing the components of low-carbon industrialisation: steel, aluminium, cement, silicon, lithium and rare earth minerals.

At about 35%2 of total output, generation of electricity is Australia’s largest source of carbon emissions.3 But electricity is also key to rapid decarbonisation of other major emitters such as transport, industrial processing and manufacturing, that now account for 54%4 of the country’s emissions.
Green hydrogen, for example, could be a transformative element in the decarbonisation of polluting activity such as steel production, ammonia manufacture, alumina and silica refining, transport, and peaking electricity generation. But for that to occur, green hydrogen would have to be produced using clean, renewable electricity. And that puts the Australian industrial economy at a crossroads: embrace the clean energy transition or decline along with fossil fuels.

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