America was the world’s largest producer of primary aluminum until recently. Now companies are warning the 2% U.S. market share puts the energy transition at risk

Annie Sartor
Tue, October 17, 2023

Li Xin - VCG - Getty Images

More than a dozen companies, including Fortune 500 companies such as Ford, GM, Pepsi, and Ball Corporation, recently wrote a letter to Secretary of Energy Jennifer Granholm, asking for federal investment in clean aluminum. This letter signals the growing urgency around a domestic clean aluminum supply. The market has spoken—and companies are asking for funding and support to save this key American industry that will only grow more important as demand is projected to spike.

These pioneering companies understand that the U.S. is becoming increasingly dependent on foreign aluminum supply, and as demand increases, supply could come from countries that show no substantive signs of cleaning up their industry, such as China (58% of the global market), and Russia (5% of the global market).

While the six remaining smelters in the U.S. currently constitute a small and shrinking percentage of global primary aluminum capacity, it wasn’t always the case. As recently as 2000, the U.S. was the largest global producer of primary aluminum. In 2022, the U.S. had less than 2% of the global market share.

"As significant buyers of primary aluminum, we strongly support federal investments via the Inflation Reduction Act (IRA) to ensure that the United States will be a leader in producing this critical material, which is essential to America’s economic growth," reads the letter. "Today, primary aluminum production in the United States is in crisis. While global demand for primary aluminum is forecast to grow over the coming decades, domestic primary aluminum production has continued to decline and is at risk of disappearing. Spiking electricity prices, lack of access to low-cost renewable energy, and insufficient federal investment have pushed the remaining six primary smelters to the brink."

As funds from the IRA are distributed to clean up American industry and create jobs, it would be easy to dismiss aluminum as a small industry because of its current state. However, the growing global demand for primary aluminum (that has not been recycled) is projected to grow at an unprecedented rate. U.S. production must grow with it to provide the very aluminum needed to build the clean energy infrastructure the IRA supports, from electric cars to solar panels and transmission lines. Without this supply, the vital clean energy revolution ahead will be reliant on higher-carbon aluminum at a time when emissions reductions are essential.

Fortunately, these forward-thinking companies see that their customers will increasingly demand cleaner supply chains, and U.S. manufacturers will need a reliable domestic supply of aluminum for their products. Demand from customers is growing, and these consumer-facing companies are keeping pace. Aluminum producers such as Alcoa see the writing on the wall too. Its 2022 sustainability report speaks to the need to “reduce risk and future liabilities by minimizing social and environmental impacts.” In other words, consumer-facing companies and aluminum producers see sustainable aluminum as not only an aspirational responsibility but also core to their business model and America’s competitive advantage in the global economy.

When environmentalists, national security advocates, industrialists, labor, and communities agree, it’s clear that the missing piece is federal investment. Let’s hope the Department of Energy is able to see the advantage in reshoring jobs, reviving a once-strong American industry, and investing in the clean energy future.

Annie Sartor is the aluminum campaign director for Industrious Labs, an organization focused on reimagining the industrial sector as a foundational part of the U.S. clean energy economy.