The global aluminium industry in 2025 entered into a new era where carbon metrics are becoming just as important as cost and quality of the product. With new pricing benchmarks for low-emission products and the increasing impact of regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM), low-carbon aluminium is facing a rising demand across sectors, but especially within the automobile industry. In 2026 and beyond, the rising demand for low-carbon aluminium will become a clearly defined and rise as a valuable segment, driven by unique price signals, market incentives and compliance needs.

Recycled aluminium consumption in automotive sector

In 2024, the global automotive industry, which includes passenger cars, commercial vehicles and motorcycles, recorded a total recycled or secondary aluminium usage between 12.2 million tonnes and 12.5 million tonnes, which is nearly 44 per cent of overall aluminium consumption (both primary and secondary) of 27.52 million tonnes for the overall transportation sector, including railways, aerospace, marine and other, during the same period. This volume is, however, likely to increase to 28.63 million tonnes by 2025. 

Who is supplying this aluminium to the automotive industry? Given below are the collaborations between low-carbon aluminium providers and auto companies.

Mercedes-Benz shakes hands with Norsk Hydro

Mercedes-Benz uses low-carbon aluminium in the production of its new electric CLA, which cuts down CO2 emissions by 40 per cent in comparison to its non-electric vehicles. The Norwegian metals company Norsk Hydro will be providing the low-carbon aluminium, which is produced by using renewable energy and 25 per cent recycled scrap. The production of these low-carbon aluminium only releases 3 kilograms of CO2 for every kilogram of aluminium, which is a vast improvement compared to the global average of 16.7 kilograms. The auto company notes that the higher price due to the low-carbon aluminium does not dissuade consumers. 

Hydro and Nemak collaborate to develop low-carbon AL for autos

Hydro inked a letter of intent (LOI) with Nemak, an automotive supplier, to join hands in making low-carbon aluminium casting products tailored for the automotive sector. This partnership aims to accelerate decarbonization efforts and aid car manufacturers in achieving their sustainability targets. As part of the LOI, both firms are looking to boost the use of post-consumer scrap and transition to cleaner energy sources, like natural gas and electric boilers, at Hydro’s Alunorte alumina refinery in Brazil. The long-term goal looks ahead to creating foundry alloy aluminium solutions that meet automotive standards with a CO₂ footprint of less than 3.0 kg per kilo of aluminium. Hydro already provides Nemak with its REDUXA primary foundry alloy, which boasts a carbon footprint significantly lower than the global average. 

RUSAL's low-carbon aluminium foundry alloys for auto

In mid 2025, RUSAL, a major global aluminium producer, launched the commercial production of its new Primary Equivalent Foundry Alloys (PEFA), which is being specifically tailored for the automotive industry. How is this going to make any change? These innovative aluminium alloys use nearly 40 per cent post-consumer aluminium scrap. The production of these low-carbon aluminium alloys will be done at the Irkutsk Aluminium Smelter, where, previously, the firm had increased the usage of recycled metals. In the production process, the post-consumer scrap will be converted into molten low-carbon ALLOW aluminium, which is deemed to be RUSAL’s proprietary brand which uses renewable energy sources. PEFA alloys are designed to match the performance and technical standards of primary foundry alloys, particularly in applications such as aluminium wheels and structural automotive components.

Volvo Penta sources low-carbon aluminium from Roots Cast

Roots Cast launched a new line of low-carbon aluminium castings, which is being made entirely from 100 per cent recycled aluminium scrap, cutting down the need for bauxite mining as well as reducing energy consumption. These castings are produced using 100 per cent renewable energy and cutting-edge production technologies, achieving one of the lowest emission rates in the industry at just 0.789 kg CO₂ for every kg of aluminium. 

It will be supplied to Volvo Penta to help the OEM meet its net-zero targets, aiding in the firm’s strategy, which includes using electric transport for recycled ingots and enhanced melting and core-sand reclamation systems, allowing OEMs and Tier-1 suppliers in the automotive, transportation and industrial equipment sectors to lower their Scope 3 emissions while still ensuring top-notch performance and durability. The company’s commitment to sustainability has earned it the GreenPro Type-1 Ecolabel after a thorough life-cycle assessment, placing Roots Cast among the cleanest aluminium casting producers out there.

In 2025, the low-carbon aluminium did not only aid the auto makers, but also the auto companies supported the global aluminium industry with its scrap to emerge with products made with nearly 100 per cent recycled content. Here’s how the aluminium benefited from the auto scraps.
Novelis makes aluminium coil from automotive scrap

Novelis, a leading global aluminium recycler, has made the first aluminium coil, which has been crafted entirely from 100 per cent recycled end-of-life automotive scrap. The aluminium coil is designed for the European automotive market and represents a major leap forward in sustainability and circularity within the industry. The coil not only meets strict surface quality standards and formability in the car body outer skin applications but also uplifts the firm’s dedication to boost recycled content in its offerings. By collaborating with industry partners and automakers, Novelis is sourcing scrap through the Automotive Circularity Platform, which helps streamline access to high-quality end-of-life materials. Now the focus is on adopting technology to increase the recycled content in future vehicle designs. 

Novelis’ collaborative move does not stop here. The firm, earlier this year, had set an ambitious goal to achieve at least 95 per cent recycling in its automotive aluminium division. The firm is teaming up with the Aditya Birla Group for The Future is Neutral, a circular enterprise focused on the automotive circular economy, increasing the production of aluminium sheets that contain a minimum of 50 per cent post-consumer scrap sourced from end-of-life vehicles. This partnership aims to create a circular economy solution for retired cars by incorporating more recycled materials into vehicle manufacturing. It’s all part of the Group’s sustainability strategy, with the hope of revolutionising how the automotive industry utilises recycled aluminium.

Recycling turns high-grade aluminium into more EVs

Stefan Pogatscher, who leads a research team at the University of Leoben, built an innovative aluminium recycling method, which involves melting mixed automotive scrap alloys after a reheating process. This yields high-grade aluminium, boasting mechanical properties on par with or even better than those of primary wrought alloys. The process can handle up to 40 different alloy types in a single melt, turning what was once a brittle material into ductile, usable stock for structural applications like chassis and frames. In addition to this, this works with existing industrial equipment, although more testing and industry buy-in are necessary to ensure performance and consistency at a larger scale. By redirecting millions of tonnes of automotive scrap into high-quality recycled aluminium, building more electric vehicles can be significantly done, which further supports sustainability. 

Source：AL Circle