Clean energy's aluminum paradox

Your guide to the political forces shaping the energy transformation

Mar 13, 2024 View in browser   By Arianna Skibell Worker in an aluminum factory. | iStock Aluminum is critical for building the nation’s clean energy infrastructure. But production of the material — a key ingredient in everything from solar panels and cars to airplanes and power lines — requires near-constant electricity at high volumes, often racking up quite a carbon footprint. It’s also expensive, which is one reason the nation’s aluminum plants are dropping like flies. The recent shuttering of a plant in Missouri marks the third closure of a U.S. aluminum factory in under two years, writes Jason Plautz. The Magnitude 7 Metals smelter had the capacity to produce as much as 30 percent of the nation’s aluminum supply. It was also the state’s single-largest consumer of energy and relied heavily on coal-fired power, underlining a paradox: Clean energy requires a lot of aluminum, which needs a lot of clean energy to be produced without planet-warming emissions. But only four plants remain in the country, and just two are running at full capacity. Most of America’s aluminum is imported. “If we want electric vehicles, batteries, solar panels [and] wind turbines, we could find ourselves in a position where we have to rely on adversaries that have the materials and processes necessary to make the energy transition,” Joe Quinn with SAFE, a group that promotes domestic energy, told Jason. The Biden administration has poured billions of dollars into building out a domestic supply chain for the materials, including aluminum, needed to transition the nation’s energy system away from fossil fuels. But experts say the deployment of those policies is not happening fast enough to change the economics of the aluminum industry. Production of aluminum in the United States, once a top producer, peaked in 1980. By 2021, the country consumed 4.3 million metric tons but produced only 880,000. The decline is in large part due to the high cost of power. In June 2022, an aluminum smelter in Kentucky closed after its power costs tripled, making operations untenable. Without cheap, clean energy, producing aluminum in the United States will be difficult. “This industry needs energy at the right price to stop the bleeding,” Annie Sartor with Industrious Labs told Jason.   It's Wednesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. And folks, let's keep it classy.   On the ground in Albany. Get critical policy news and analysis inside New York State. Track how power brokers are driving change across legislation and budget and impacting lobbying efforts. Learn more.     Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Wes Venteicher breaks down potential snags in California’s pursuit of offshore wind and how they fit into broader concerns within the industry. Power Centers Solar panels are seen with New York City apartment buildings in the background. | Mark Lennihan/AP Here comes $20B in climate finance EPA is about to give a handful of nonprofits $20 billion to make green lending accessible to more Americans, writes Jean Chemnick. The financing will aid tens of thousands of green energy and energy efficiency projects — with at least 40 percent of the benefits flowing to disadvantaged communities. Pitfalls in Wall Street climate rule The Securities and Exchange Commission's landmark climate disclosure rule leaves a lot of uncertainty about whether investors will get the data they need to verify public companies’ climate promises, write Avery Ellfeldt and Benjamin Storrow. The SEC will not require companies to follow a single, rigid standard for reporting planet-warming emissions. Instead, Wall Street’s top financial regulator will give companies leeway over how to calculate the information. EU snubs struggling solar The European Union has hinted it won't help ailing solar manufacturers, putting thousands of jobs and the bloc's clean energy ambitions at risk, writes Victor Jack. The move could also deliver a major win to China, whose near-total dominance over global supply chains has caused a glut of dirt-cheap solar panels and left EU makers unable to compete. In Other News Analysis: Biden's climate law has injected $240 billion into clean energy. The U.S. needs more. Alt-meat mayhem: Across the nation, lawmakers are trying to ban lab-grown meat.   JOIN US ON 3/21 FOR A TALK ON FINANCIAL LITERACY: Americans from all communities should be able to save, build wealth, and escape generational poverty, but doing so requires financial literacy. How can government and industry ensure access to digital financial tools to help all Americans achieve this? Join POLITICO on March 21 as we explore how Congress, regulators, financial institutions and nonprofits are working to improve financial literacy education for all. REGISTER HERE.     Subscriber Zone A showcase of some of our best subscriber content. Pennsylvania Gov. Josh Shapiro (D). | Matt Rourke/AP Pennsylvania Gov. Josh Shapiro (D) proposed a statewide cap-and-invest program to replace the Regional Greenhouse Gas Initiative that has bedeviled state officials for five years. The Biden administration has unveiled a first-of-its-kind road map for building electric charging and hydrogen fueling infrastructure for freight trucks by 2040. Supporters of Washington state's new carbon market are spending millions of dollars in an effort to defeat a conservative-backed ballot measure that would repeal the market. That's it for today, folks! Thanks for reading.   Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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