The Albanese Labor Government has announced a landmark $2 billion AUD investment in Australia’s aluminium sector, a move that aims to bolster manufacturing, reduce emissions, and secure regional jobs. Central to the initiative is the Green Aluminium Production Credit, which aims to transition aluminium smelters to renewable energy by 2036.
Transforming a High-Emission Industry
Australia’s aluminium industry, the sixth-largest globally, is a cornerstone of the country’s manufacturing sector, but also one of its most energy-intensive. Aluminium production currently consumes nearly 10% of Australia’s electricity, much of it derived from coal-fired power. The new credit scheme will incentivise smelters to adopt renewable energy by providing financial support for every tonne of clean aluminium produced over the next decade.
Prime Minister Anthony Albanese framed the initiative as a critical step in Australia’s broader transition to a low-carbon economy. “We are building Australia’s future, not taking Australia backward,” he said. “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.”
Economic and Employment Gains
The government anticipates that this investment will raise the industry’s annual GDP contribution from $5.1 billion to $6 billion by 2050. It will also strive to safeguard existing jobs and create new opportunities in regional areas such as Gladstone in Queensland, Bell Bay in Tasmania, and Tomago in New South Wales.
“This package guarantees good blue-collar jobs in the Hunter, Central Queensland, and Northern Tasmania,” said Assistant Minister Tim Ayres. He highlighted the initiative’s alignment with the government’s broader $22.7 billion manufacturing program aimed at revitalising domestic industries.
An Opportunity to Lead in Green Metals
With global demand for low-carbon products surging, the initiative could place Australia as a leader in green aluminium production. The transition is expected not just to meet the needs of industries seeking sustainable supply chains but also to solidify Australia’s competitiveness in a decarbonising global economy.
Industry Minister Ed Husic emphasised the opportunity to capitalise on Australia’s abundant resources, including renewable energy potential, critical minerals, and a skilled workforce. “Jobs up, emissions down, and a secure future for our world-class aluminium industry – that’s what today’s announcement provides,” he said on Monday.
Major industry players have expressed strong support. Rio Tinto’s Australia CEO, Kellie Parker, called the government’s commitment a “critical piece in helping future-proof the industry,” and the Australian Aluminium Council described it as a “substantial step forward” in positioning Australia as a leader in the global green metals market.
Proposed Environmental and Global Benefits
By transitioning to renewable energy, the initiative could significantly cut emissions in a sector that heavily contributes to Australia’s carbon footprint. Environmental groups, including the Australian Conservation Foundation, welcomed the plan. “Green aluminium exports have the potential to contribute to Australia’s economy for generations, unlike coal and gas exports that deliver very little for communities while damaging the climate,” said Gavan McFadzean, the foundation’s climate and energy program manager.
Globally, the aluminium industry accounts for approximately 2% of greenhouse gas emissions. With demand projected to rise by 40% by 2030, sustainable production will be increasingly vital. The Green Aluminium Production Credit could enable Australia to become a key supplier in this emerging market, supporting industries worldwide as they move toward net-zero goals.