Domestic production of aluminum is in danger of being priced out by fossil fuel costs at a time when global demand is set to skyrocket.
Ford, GM and Rivian, along with 11 more companies in a wide range of other industries, sent a letter Oct. 5 to the U.S. Department of Energy (DOE) to encourage the investment of Inflation Reduction Act funds in modernizing the American aluminum industry.
The letter was published on www.buycleanaluminum.com and in full page ads in five newspapers in New York, Missouri, Kentucky, South Carolina and Indiana, where the remaining six primary U.S. aluminum smelters are located. DOE officials are currently evaluating applications from those smelters to invest IRA dollars that will reduce emissions from manufacturing processes and power supplies.
In a news release, Ford said aluminum is used in everyday food and beverage products, as well as "clean energy" products like solar panels, wind turbines, heat pumps, transmission lines, electric vehicles and more. Global demand for aluminum is set to increase nearly 40% by 2030 and 80% by 2050.
Yet, in the past 18 months, the U.S. primary aluminum industry has been pushed "to the brink," plagued by layoffs, curtailed production and closures due in part to the volatile price of fossil fuels. Power supply accounts for 40% of U.S. smelters’ total production costs, and smelters in Kentucky and Indiana said high energy costs due to volatile fossil fuel prices necessitated curtailing operations last year. At the same time, the price of electricity from renewable sources like wind and solar has plummeted over the last decade.
Rather than allow these smelters to become priced out, the federal government can secure low-cost electricity supplies in the short term while investing in long-term supplies of cheap, renewable energy.
"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," the letter to the DOE said.
"The IRA is poised to make the largest-ever investment in U.S. manufacturing, supercharging aluminum-dependent clean energy technologies" like wind and solar, which is forecasted to alone exceed all current aluminum consumption, the letter said.
"In order to meet increased aluminum demand that will affect all our industries, the U.S. must invest heavily in supply," the letter said.
Investing in the U.S. aluminum industry will retain and create manufacturing jobs, help reduce emissions and grow and sustain the industry in the interest of national security, the letter said, urging the DOE to prioritize decarbonization of aluminum and the deployment of low-cost carbon-free energy the industry critically needs.
“Ford is committed to achieving carbon neutrality across our vehicles, operations and supply chain no later than 2050, and sourcing domestically produced, lower-carbon primary aluminum is part of a host of actions we are taking that will help us meet our ambitious sustainability goals,” said Cynthia Williams, global director of sustainability, homologation and compliance at Ford, in a statement. “The Inflation Reduction Act presents a powerful opportunity for the Department of Energy to prioritize American-made, clean sources of aluminum, which will in turn make more sustainable options available to companies like Ford."