Let green-electricity aluminum become a shining hallmark of China’s aluminum industry.

　　China’s electrolytic aluminum industry is emerging as a key driver in absorbing green electricity and a pioneer in carbon reduction. To ensure that the green and low-carbon attributes and value of electrolytic aluminum products produced using such green electricity are effectively passed down to downstream sectors, the China Nonferrous Metals Industry Association has taken the lead globally in introducing the concept of “green-electricity aluminum” and has launched related evaluation and promotional activities, thereby attracting widespread attention and positive responses from the aluminum industry chain and related sectors. However, for green-electricity aluminum to gain broader acceptance and preference among consumers both domestically and internationally within a short period, in addition to voluntary actions by the industry and enterprises themselves, there is an urgent need for supportive policies and regulatory measures.

　　China is the world’s largest producer and consumer of primary aluminum, as well as the world’s largest exporter of aluminum materials and products. In recent years, as China has stepped up its efforts in energy transition and supply-side structural reform, coupled with the introduction and implementation of China’s “dual-carbon” goals, China’s primary aluminum industry has been adapting to these developmental changes with a proactive attitude and at an accelerated pace. Its production technologies and energy consumption levels have already reached globally leading standards. China’s primary aluminum production capacity is shifting toward regions rich in green and renewable energy sources, thus ushering in a new chapter of green development for China’s primary aluminum industry. Green-electricity-based aluminum is becoming a new highlight of China’s aluminum industry, while also enabling the world to share a green and low-carbon aluminum raw-material supply chain.

　　Let green-electricity aluminum “resonate”!

　　For a long time, China’s electrolytic aluminum enterprises have been criticized for their high energy consumption and rapid capacity expansion. However, as aluminum is an essential basic raw material in China, the country’s current national conditions and economic development level dictate that, in the short term, we cannot do without a certain scale of electrolytic aluminum production. At the same time, aluminum is a metal that can be recycled and reused, and its recycling process features low energy consumption and low carbon emissions, thereby highlighting its inherent value. Consequently, the Chinese government attaches great importance to the aluminum industry and regards it as one of the key sectors subject to macroeconomic regulation. In the “Notice from the Ministry of Industry and Information Technology on Matters Relating to Capacity Replacement through Mergers and Reorganizations by Electrolytic Aluminum Enterprises,” the government has clearly set a “ceiling” of 45.42 million tons for China’s electrolytic aluminum capacity. As a result, China’s electrolytic aluminum industry has begun to align itself with the nation’s broader trend toward green and low-carbon development, shifting from extensive growth to intensive growth, embracing a green transformation, and undergoing new qualitative changes.

　　Among these developments, the most significant highlight is the shift of electrolytic aluminum production capacity toward western regions rich in green energy resources—particularly those abundant in hydropower as well as wind and solar resources. By the end of 2023, provinces and autonomous regions with energy advantages, such as Inner Mongolia, Xinjiang, Yunnan, Gansu, and Qinghai, had already taken on more than 50% of China’s total electrolytic aluminum capacity transfer, with currently operational capacity reaching 24 million tons. These electrolytic aluminum enterprises have not only become major players in absorbing renewable energy but have also emerged as new and vital forces in renewable energy investment and development. They are actively pursuing energy transitions by constructing photovoltaic power stations, developing distributed PV projects within industrial parks, and implementing integrated source-grid-load-storage initiatives. Leading electrolytic aluminum companies—including Aluminum Corporation of China Ltd., State Power Investment Corporation Ltd., China Hongqiao Group Ltd., Henan Shenhuo Group Co., Ltd., and Sichuan Zhongfu Technology Development Co., Ltd.—have played exemplary and pioneering roles in this transformation.

　　To distinguish electrolytic aluminum produced using renewable energy and to convey the green, low-carbon attributes of these products to downstream industries, the China Nonferrous Metals Industry Association was the first in the world to introduce the concept of “green-electricity aluminum” and launched an evaluation program for green-electricity aluminum in June 2023. Green-electricity aluminum effectively captures both the energy characteristics and product attributes of these electrolytic aluminum enterprises. The “green electricity” referred to here encompasses renewable energy sources such as wind power, solar power, hydropower, biomass power, geothermal power, and ocean energy—all of which have been officially recognized by the Chinese government. The definition of green-electricity aluminum is scientifically sound and accurately named. Consequently, immediately after its introduction, the concept has garnered a strong response from domestic electrolytic aluminum companies and has also enabled the public to gain a completely new understanding of electrolytic aluminum.

　　According to the group standard T/CNIA0618-2022 “Guidelines for Green Electricity Aluminum Evaluation and Trading” issued by the China Nonferrous Metals Industry Association, as of December 20, 2024, a total of 37 enterprises have participated in the green electricity aluminum evaluation, with an aggregate evaluated volume of 3.2 million tons of green electricity aluminum. While green electricity aluminum is gaining recognition within the primary electrolytic aluminum industry, its value is also beginning to be recognized and attracted attention from downstream and related industries. In particular, leading enterprises in sectors such as automotive, photovoltaics, lithium batteries, aerospace, and packaging are showing heightened interest in green electricity aluminum and a stronger willingness to procure it. This trend aligns well with the growing demand for green and low-carbon raw materials driven by both international export markets and China’s domestic manufacturing sector as it undergoes a green and low-carbon transformation.

　　Since the implementation of green-electricity aluminum initiatives, the initiative has quickly attracted attention from downstream and numerous enterprises, which have actively begun to procure it. This clearly demonstrates the forward-looking vision of industry organizations in promoting the development of green-electricity aluminum and underscores its profound practical and strategic significance for the industry’s green and low-carbon development.

　　Make green-electricity aluminum “popular” and in demand.

　　According to statistics from the China Nonferrous Metals Industry Association, in 2023, the proportion of renewable energy used by China's electrolytic aluminum enterprises reached 24.4%, and the annual output of green-electricity-based aluminum exceeded 10 million tons. Compared with aluminum produced using fossil-fuel power, which has a carbon dioxide emission factor of 0.8426 kg CO2/kWh as published by the Ministry of Ecology and Environment and the National Bureau of Statistics for 2021, producing one ton of aluminum using green electricity can indirectly reduce carbon emissions by approximately 11.5 tons. Thus, green-electricity-based aluminum demonstrates a significant carbon-reduction effect. Based on the 2023 output of green-electricity-based aluminum, this translates into a carbon reduction of over 115 million tons. It is evident that green-electricity-based aluminum has truly become a pioneer in carbon reduction.

　　In May 2024, the "Action Plan for Energy Conservation and Carbon Reduction 2024–2025," issued by the State Council, explicitly stated that by the end of 2025, the proportion of renewable energy used in electrolytic aluminum production will reach over 25%.

　　In August 2024, the National Development and Reform Commission and the National Energy Administration jointly issued the "Notice on the 2024 Renewable Energy Power Consumption Responsibility Weights and Related Matters," which further clarified the responsibility weights for renewable energy power consumption and non-hydro renewable energy power consumption in each province for 2024 and 2025. At the same time, the notice also set forth the proportion of green electricity consumption for the electrolytic aluminum industry in 2024 and 2025. Among them, the lowest proportion of green electricity consumption for electrolytic aluminum was 21%, while the highest reached 70%. Given the critical role that green-electricity-powered aluminum plays in promoting low-carbon development within the industry, it should naturally become more sought-after in market competition. To make green-electricity-powered aluminum more attractive, it is essential to highlight its competitive advantages and premium pricing based on its product category—thus emphasizing its green and low-carbon value. Specifically, under the same price conditions, green-electricity-powered aluminum should be given priority in procurement; and among products of identical specifications, those powered by green and low-carbon energy sources should command a premium price.

　　Currently, green-electricity aluminum is highly regarded, yet it’s far from achieving widespread popularity. At this stage, green-electricity aluminum remains in the early stages of building momentum, and its scarcity and reasonable premium have not yet been fully realized. The reasons behind this are:

　　On the one hand, green-electricity aluminum is industry-led, and its promotion and marketing are gradually gaining widespread recognition among downstream and related industries. On the other hand, at this stage, green-electricity aluminum lacks a scientifically sound premium mechanism; the market is still in the early stages of development, and prices are currently being discovered. At present, the market premiums for green-electricity aluminum are mainly based on negotiated prices among enterprises, which lack universal reference value and have dampened the purchasing enthusiasm of downstream and related industries. Some industry insiders believe that the factors influencing the premium for green-electricity aluminum are also linked to the market feedback following the final implementation of relevant policies regarding foreign green trade barriers.

　　In addition, the factors influencing the premium for green-electricity aluminum are also related to the fact that China’s primary aluminum production has not yet been included in the carbon trading market. The true impact of the carbon trading market on primary aluminum prices in the later stages remains to be seen. Since the carbon emission control targets adopted for primary aluminum production will be allocated free of charge, the quantity of quotas allocated to enterprises will be linked to their production output, and no overall cap has been set on the total quota volume. This means that, for now, the policy has little immediate impact on relevant enterprises, which in turn indirectly affects the premium for green-electricity aluminum.

　　In short, although various factors have prevented the expected premium for green-electricity-based aluminum from being fully realized, this does not alter the trend of green-electricity-based aluminum becoming increasingly popular in the market.

　　Get green electricity aluminum “fired up”!

　　At this stage, although there is a distinction between direct and indirect carbon emissions in terms of how corporate carbon emissions or product carbon footprints are calculated, and although other factors also influence the market price of green-electricity aluminum, green-electricity aluminum itself remains a green, low-carbon product. The green, low-carbon attributes of this product undeniably generate green, low-carbon value that cascades downstream and into related industries. Getting green-electricity aluminum “hot” means reducing corporate carbon emissions or product carbon footprints. This is a consensus—both within and beyond the industry—and it’s an ironclad rule. To promote the widespread adoption of green-electricity aluminum and make it truly “hot,” industry organizations are making tireless efforts and providing crucial guidance.

　　First, we will promote the transition from evaluation to certification. To ensure that green-electricity aluminum products gain broader recognition at the national, regional, and international levels, the China Nonferrous Metals Industry Association will, building on existing evaluation efforts, introduce a certification system for green-electricity aluminum. It is reported that the Nonferrous Metals Technical and Economic Research Institute Co., Ltd., as a certification body accredited by the State Administration for Market Regulation and Accreditation (Approval No.: CNCA-R-2024-1369), is actively responding to industry demand and accelerating the development of the “Rules for Green-Electricity Aluminum Certification.” The institute plans to launch certification services for green-electricity aluminum, meaning that soon China’s green-electricity aluminum products will have independent, impartial, and authoritative third-party certification. This will undoubtedly further facilitate the promotion, marketing, and wider adoption of green-electricity aluminum products.

　　Second, we will strengthen exchanges and cooperation with relevant industry organizations and international bodies to strive for mutual recognition of green electricity aluminum. The Green Product Evaluation Center of the China Nonferrous Metals Industry Association is leveraging its position within the industry association to enhance collaboration with domestic industry organizations and institutions—for instance, by recommending the priority use of green electricity aluminum in the green and low-carbon procurement of aluminum materials for the automotive industry—and is also stepping up communication with international organizations such as the International Aluminium Institute (IAI), thereby helping green electricity aluminum gain international recognition.

　　To boost the popularity of green-electricity-powered aluminum, in addition to efforts by industry associations and enterprises, there is an urgent need for effective policy support and strong backing from green finance policies. In particular, Chinese export enterprises and domestic manufacturers—especially those engaged in high-end manufacturing—should be strongly encouraged to prioritize the procurement and use of green-electricity-powered aluminum.

　　First, green-electricity aluminum should be incorporated into futures delivery as soon as possible. We must fully leverage the role of futures platforms to discover market prices. Currently, integrating green-electricity aluminum into delivery is technically feasible, meets market demand, and enjoys industry-wide consensus. Green-electricity aluminum builds on the existing futures framework for aluminum products already listed on exchanges; its delivery process would not require any amendments to current aluminum futures rules—only a distinction within existing futures contracts to reflect its green-energy attributes and allow for a corresponding premium. The introduction of green-electricity aluminum into futures trading will undoubtedly empower the industry, making its price more readily accepted by the market and thereby promoting wider adoption of green-electricity aluminum. Including green-electricity aluminum in futures delivery represents a financial innovation and also poses a significant test for regulatory oversight. At present, green-electricity aluminum remains an industry concept with no universally recognized name in the international market—a true global leader in this space. As regulators, we must take the lead in launching this product, establishing it as a Chinese commodity concept and solidifying the “Shanghai Price” for green-electricity aluminum globally. In doing so, we can secure China’s voice and influence in the global discourse on green-electricity aluminum and aluminum products.

　　Second, provide financial inclusion to enterprises engaged in green-electricity-based aluminum production and procurement, and support the development of the green-electricity-based aluminum industry chain. Fully leverage the role of financial services in supporting the real economy by offering priority loans, subsidized interest-rate loans, facilitating access to capital markets, and providing tax and fiscal incentives for green-electricity-based aluminum project construction, green-electricity-based aluminum procurement and trade, and green-electricity-based aluminum raw material processing—thereby promoting high-quality development of green-electricity-based aluminum and its related industry chain.

　　The low-carbon footprint of green-electricity-based aluminum production is crystal clear: In 2023, China’s electrolytic aluminum industry consumed a total of 570 billion kilowatt-hours of electricity, accounting for 6.18% of the country’s total electricity consumption in 2023 and 9.39% of industrial electricity consumption. Among this, green electricity consumption by China’s electrolytic aluminum sector already accounted for 24.4% of its total electricity usage, reaching 140 billion kilowatt-hours—equivalent to 4.56% of the nation’s total green power generation in 2023. In 2023, China’s aluminum industry emitted 530 million tons of carbon dioxide, of which 420 million tons came from electrolytic aluminum production, representing 79.2% of the industry’s total carbon emissions. Clearly, the electrolytic aluminum industry is now leveraging the country’s unique advantages in green energy to rewrite the history of its development. Only when electrolytic aluminum production becomes green and low-carbon can the entire industrial chain build a solid foundation for green and low-carbon operations.

　　In short, making green-electricity aluminum “well-known,” “popular,” and “in demand” is a remarkable industry achievement that benefits both the country and its people.