Consultation opens on plan linking aluminium credits to real emission cuts
Energy and manufacturing professionals are being asked to help shape the design of a $2 billion Green Aluminium Production Credit that will reward Australian smelters cutting emissions by switching to renewable power, with consultation open until 30 October 2025.
The federal government is seeking feedback from industry on how best to deliver the Green Aluminium Production Credit, part of a $2 billion package aimed at supporting Australian aluminium smelters to move away from fossil-fuel electricity and reduce their emissions.
Aluminium is a key input for construction, defence, transport and electronics, and for clean-energy infrastructure such as solar panels, wind turbines and transmission lines. The credit is intended to position Australian producers to supply growing markets for green metals while cutting national emissions.
The initiative forms part of the Future Made in Australia agenda and is designed to help one of the country’s most energy-intensive sectors meet emissions-reduction targets. Aluminium smelters account for about 10 percent of a state’s electricity use and contribute between 3 and 4 percent of Australia’s total greenhouse gas emissions.
Under the proposed scheme, smelters that can demonstrate major emission reductions before 2036 will be able to negotiate a credit contract linked to performance, paid per tonne of low-carbon aluminium produced. Each agreement could run for up to 10 years, or until 2044, depending on the facility’s circumstances. Credits would offset part of the cost of sourcing renewable electricity and decarbonising operations.
The Department of Industry, Science and Resources is now consulting on key settings such as eligibility criteria, credit rates and payment structures. Feedback is also sought on practical issues — including administrative processes and challenges the sector faces in cutting emissions — to inform final advice to government.
Assistant Minister for Industry and Innovation Tim Ayres said the consultation comes as demand for low-carbon metals continues to grow both in Australia and among trading partners.
“Australia’s aluminium smelters have long been the backbone of our manufacturing sector,” he said. “With the right stable policy settings and incentives, abundant renewable energy and rich mineral resources, Australia has what it takes to lead the world in aluminium production made using renewable energy.”
Prime Minister Anthony Albanese said the credit would strengthen regional economies and help secure long-term manufacturing jobs.
“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,” he said.
Submissions can be made through the government’s consultation hub until 11:59 pm AEDT on 30 October 2025.
