Can the US lead on clean aluminum? Ford, GM and others hope so

Ford, General Motors, Rivian and SunPower are among a group of companies calling on the Biden administration to make the U.S. a powerhouse producer of clean aluminum, a metal crucial to the energy transition.

A total of 14 aluminum buyers, from electric-vehicle manufacturers to solar-panel producers (and even some alcoholic-beverage makers), issued a first-of-a-kind letter to U.S. Department of Energy Secretary Jennifer Granholm last week, urging her agency to use funds from the Inflation Reduction Act to spur a domestic supply of low- to zero-carbon aluminum.

The companies’ plea is timely. The DOE is evaluating applications for the $6.3 billion Industrial Demonstrations Program, funded by the IRA and the Bipartisan Infrastructure Law, to decarbonize the highest-emitting heavy industries, including steel, concrete, chemicals and aluminum. And competition for those funds will be fierce; the DOE has received significantly more interest than it can fund. DOE plans to select award recipients by early 2024.

“We don’t want aluminum to get left behind,” said Annie Sartor, aluminum campaign director for Industrious Labs, an advocacy organization that helped convene the companies that wrote the letter. ​“Aluminum decarbonization is very much needed, up and down the supply chain. And this letter is meant to underline that these investments are desired by a much broader industry.”

Aluminum is a linchpin of the clean-energy economy. The gleaming metal is found not only in EVs and solar panels, but also in wind turbines, heat pumps and the transmission lines critical for building out the grid. By 2035, IRA-driven demand for aluminum for use in wind turbines and solar panels is forecast to exceed all of the aluminum produced in the U.S. in 2022. So the industry now faces the twin challenges of drastically ramping up production while simultaneously slashing CO₂ from its operations, which currently account for 2 percent of global greenhouse gas emissions annually.

The industry’s emissions stem mainly from the incredible amount of electricity used to produce primary aluminum, which is refined directly from ore rather than recycled metal. In this process, smelters zap 1,700˚F-plus baths of molten salt and aluminum oxide with electricity in order to precipitate out pure aluminum.

In 2021, roughly 70 percent of U.S. aluminum’s emissions came from those electricity demands, according to a report by the nonprofit Environmental Integrity Project. Only one plant in the U.S. runs on renewable hydropower, while the others run on fossil fuels, including coal, Sartor said.

Of the remaining 30 percent of emissions, about 20 percent are a byproduct of the electrolytic reaction itself — the fossil-fuel anode that conducts electricity releases CO₂ and other greenhouse gases — and 10 percent come from making the anodes and producing the precursor aluminum oxide (alumina), according to the report.

Several of the letter’s signatories, including Ford and GM, are also members of the First Movers Coalition, a group of companies leveraging their purchasing power to drive industrial decarbonization. They’ve pledged that of the primary aluminum they buy, at least 10 percent will be low-carbon — defined by the group as emitting less than 3 metric tons of CO₂ per metric ton of aluminum — by 2030.

To help the companies make good on this pledge, the Biden administration could catalyze the production of clean aluminum and promote American jobs by funding projects that enable U.S. aluminum smelters to run on renewable electricity and to invest in anode technology that doesn’t release greenhouse gases.

A competitive supply of American-made aluminum could also bolster the clean-energy signatories’ bottom lines by helping them qualify for domestic-content tax breaks. For example, wind and solar developers can get a 10 percent bonus tax credit if specific percentages of the hardware they use are produced stateside, according to the BlueGreen Alliance, creating ​“a strong incentive for clean energy firms to buy domestic aluminum.”

But there’s not much U.S.-made aluminum to buy these days, dirty or clean. Most primary aluminum is produced by China, followed by India and Russia. Meanwhile, the U.S. aluminum industry ​“is in crisis,” according to the letter sent to Secretary Granholm: The sector has shrunk from 23 smelters three decades ago to just five in operation today. And those holdouts are struggling due to ​“spiking [fossil] electricity prices, lack of low-cost renewable energy and insufficient federal investment.”

That’s why near-term funding for clean aluminum ​“would be transformative,” Sartor told Canary Media. More federal spending could shore up the U.S. production of the key material while helping to meaningfully decarbonize it by the end of this decade, she said. The industry just ​“needs a boost to get there.”