From SAFE’s Center for Strategic Industrial Materials (C-SIM), the report, “Global Insights: Energy and Environmental Aluminum Solutions,” examines what the U.S. and allies can learn from aluminum manufacturing policies around the world to overcome challenges to the aluminum industry’s viability, including high energy costs, price volatility, and strategic market manipulation by Beijing.
Beijing, recognizing the strategic importance of aluminum, has flooded the global market to drive down prices, forcing other producers out of business and discouraging investment in new production capacity outside of China.
To avoid becoming dependent on foreign entities of concern for our supply of this vital material, the U.S. should consider some of these strategies which have worked to keep aluminum smelters afloat in other market-based economies:
- Pegging the price of aluminum to the cost of electricity.
- Imposing carbon taxes on imported aluminum made with fuels like coal.
- Strategically subsidizing aluminum smelting through tax breaks and lower energy costs.
- Coordinating with utilities to help smelters become demand-side energy providers to buoy operations.
In February, C-SIM released “The U.S. Aluminum Industry’s Energy Problem and Energy Solution,” a report examining the paradox of rising demand for aluminum’s energy-saving benefits versus the declining production due to its energy intensity in the production phase. Released in May, the “Legislative Analysis for the U.S. Aluminum Industry” report examined how federal incentives to produce more clean energy transition products do not address the main obstacle to production—access to reliable energy. And, in June C-SIM released “Political Tailwinds: Examining Trade Policy for the U.S. Aluminum Industry,” which looked at how previous presidential administrations approached aluminum trade policy, examining what worked, what didn’t, and how the current administration should move forward.