PolicyALUMINIUM Global aluminium production is highly regionalized, with China contributing 60% of the total output. This underscores the importance of implementing effective and tangible policies to improve access to clean energy in key production regions. Domestic and international regulations aimed at encouraging low-emission aluminium production are still in development. To address this, priorities should include facilitating the adoption of clean power; supporting R&D alongside market-based approaches to advance early-stage low-emission smelting and refining technologies; and enhancing recycling rates through improved collection policies and infrastructure for sorting and purifying aluminium scrap. Given that policy measures to support decarbonization are still emerging, it is crucial to establish concrete policy actions in major producing regions. Furthermore, policies and regulations to standardize carbon accounting frameworks, scope and system boundaries are pivotal to strengthening product-level reporting. Additional trust in decarbonized products, paired with stringent specifications and benchmarks, is likely to facilitate a market-based approach for decarbonized aluminium. Improved carbon accounting will conversely inform policy compliance and provide critical transparency to inform the consumer and hold producers accountable. Aluminium industry policy summary TABLE 15 Policy type Policy instruments Key examples Impact Market-basedCarbon price EU-ETS443Incentivizes aluminium producers to reduce emissions. Border adjustment tariffCBAM444Emission-intensive aluminium exporters to the EU face increased costs of compliance. Currently, 50% of aluminium consumed is imported from non-EU countries. This policy needs to be complemented by transparent and fair carbon accounting standards. Product standard Aluminium Stewardship Initiative’s Performance Standard 3, recognized by Green Building Council of AustraliaProvides transparency and standardization to the environmental performance of aluminium products.445 Mandate-basedDirect regulations Inclusion of aluminium in the EU’s Critical Raw Material Act446This act improves the circularity and sustainability of critical raw materials like aluminium but is still in the proposal stage. Government targets China’s renewable energy use targets for aluminium Doubles the share of renewables in the aluminium energy mix by 2030.447 Incentive-basedSubsidies China: provincial level subsidyPublic support to smelters to move to incentivize energy-efficiency technologies.448 Direct R&D funds/grantsCanada’s investment in ELYSIS’ inert anode technologyA direct funding investment of $60 million positions ELYSIS to support further R&D and achieve commercial scale.449 Additionally, funding support for R&D to accelerate innovative technologies should be reinforced by policies that enable technology access and transfer to developing countries. Net-Zero Industry Tracker: 2024 Edition 11

Net Zero Industry Tracker 2024 Aluminium