aluminium expo
7-9 July 2027
Hall E1-E7, Shanghai New International Expo Center

Energy Efficiency Becomes a Competitive Priority Across the Aluminium Value Chain

Energy efficiency is becoming an increasingly important factor in industrial competitiveness, influencing not only environmental performance but also production costs, productivity and long-term investment decisions.

For the aluminium industry, where electricity-intensive primary production is followed by multiple stages of processing, manufacturing and recycling, improving energy performance presents opportunities across the entire value chain.

Recent findings from the International Energy Agency (IEA), alongside developments in industrial energy policy, highlight how manufacturers are increasingly treating energy efficiency as a strategic business priority.

 

From Energy Savings to Manufacturing Competitiveness

According to the IEA's Energy Efficiency 2025 report, industry accounted for nearly 40% of global final energy consumption in 2024 and contributed approximately two-thirds of the growth in global final energy demand between 2019 and 2024.

A separate IEA analysis published in March 2026, based on a survey of 1,000 industrial companies across 14 countries, found that nearly 40% of respondents ranked energy efficiency as their primary response to rising energy costs. The findings underline the growing importance of energy performance in managing operating costs, protecting productivity and responding to energy-price volatility.

The IEA's Energy Technology Perspectives 2026 further identifies energy costs as a major factor in the competitiveness of energy-intensive upstream industries, including aluminium, steel and chemicals. Under certain production conditions, energy can account for more than two-thirds of total costs. This proportion varies considerably by process and location, but it highlights why access to affordable energy and improvements in energy efficiency remain important competitive considerations.

For aluminium producers and processors, the challenge is therefore not simply to consume less energy, but to use it more effectively while maintaining production quality, reliability and output.

 

Energy Efficiency Starts with Primary Aluminium Production

Primary aluminium smelting remains one of the industry's most electricity-intensive processes.

The Hall–Héroult process, the dominant commercial method of primary aluminium production, relies on electrolysis to convert alumina into aluminium metal. Electricity consumption is consequently a major component of smelting economics.

Improvements in electrolysis cell performance, operational control and production efficiency can help reduce electricity consumption per tonne of aluminium produced.

The IEA has identified advanced cell configurations, improved electrode designs and other electrolysis innovations as potential avenues for greater energy efficiency. However, some technologies remain under development and require further demonstration before widespread commercial deployment.

Another area attracting attention is electricity demand flexibility.

According to the IEA's Electricity 2026 report, aluminium smelting represents a substantial source of industrial electricity demand, but only a limited share of its potential is currently used for demand-response services.

With appropriate technologies and operating conditions, greater flexibility could help aluminium producers respond to changing electricity-system requirements and support the integration of variable renewable energy. Such flexibility must nevertheless be managed within the strict operational requirements of the electrolysis process.

Together, improved process efficiency and more effective electricity management offer opportunities to strengthen the competitiveness of primary aluminium production.

 

Beyond Smelting: Energy Efficiency in Processing and Recycling

Energy efficiency is equally relevant to downstream aluminium manufacturing.

Melting, casting, rolling, extrusion, heat treatment and other processing operations all require energy. Improving furnace performance, optimising thermal management, upgrading equipment and introducing digital process monitoring can help manufacturers reduce energy losses and improve operating efficiency.

For aluminium processors, these improvements can also contribute to more consistent production, lower operating costs and better material utilisation.

Recycling adds another important dimension.

According to the International Aluminium Institute (IAI), recycled aluminium production requires approximately 95.5% less primary energy than primary aluminium production under the lifecycle assessment conditions used in its comparison.

The underlying datasets estimate primary energy requirements of approximately 186 GJ per tonne for primary aluminium, compared with 8.3 GJ per tonne for recycled aluminium. These are lifecycle comparison figures rather than current annual operating averages.

The energy advantage of recycling reinforces the importance of efficient scrap collection, sorting, remelting and alloy management.

For manufacturers, the opportunity lies in combining process improvements with better material recovery. Reducing production losses and returning suitable scrap to the manufacturing process can help lower the overall energy requirements associated with aluminium supply.

Photo from Aluminum Association

 

Brazil Highlights the Role of Renewable Energy and Industrial Efficiency

Brazil offers a useful example of how renewable electricity, industrial energy efficiency and manufacturing competitiveness can be considered together.

According to the Brazilian Energy Research Office (EPE), Brazil's industrial energy mix reached a 65.1% renewable share in 2025, while renewable sources accounted for 86.8% of the country's electricity supply.

Industrial final energy consumption increased by 1.0% during the same year, highlighting the continuing importance of improving energy performance as industrial activity develops.

Brazil has also been expanding policy support for industrial energy efficiency.

In February 2026, the Brazilian government and the National Service for Industrial Training (SENAI), together with other programme partners, announced the nationwide expansion of PotencializEE, backed by R$75 million in funding.

The programme aims to support 1,765 micro, small and medium-sized industrial enterprises over three years, providing access to energy assessments, technical expertise and assistance with equipment modernisation. The initiative is designed for industry broadly rather than specifically for aluminium producers.

The case illustrates two complementary approaches to lower-carbon manufacturing: sourcing electricity from a cleaner energy system and improving the efficiency with which energy is used in industrial operations.

For energy-intensive sectors such as aluminium, both can contribute to more competitive production, although the actual benefits depend on each facility's energy sources, technologies and operating conditions.

 

Building a More Efficient Aluminium Value Chain

The growing focus on energy efficiency is reshaping how industrial companies evaluate production technologies and capital investment.

For the aluminium industry, the opportunities extend across multiple stages:

  • Primary production: improving electrolysis efficiency, operational control and electricity management.
  • Processing and manufacturing: optimising melting, casting, rolling, extrusion and heat-treatment operations.
  • Recycling: improving scrap recovery, remelting efficiency and material utilisation.
  • Digital manufacturing: using monitoring, automation and data-driven process optimisation to improve energy and production performance.

The challenge is to improve these processes without compromising product quality, operational reliability or manufacturing flexibility.

As production systems become more electrified and digitalised, energy efficiency will increasingly be assessed alongside material efficiency, carbon performance and manufacturing productivity.

For aluminium producers, processors and equipment suppliers, the next stage of competitiveness will depend not only on production capacity, but also on how efficiently aluminium can be produced, processed and returned to productive use.

These developments are closely aligned with ALUMINIUM CHINA 2027, which will bring together aluminium materials, processing equipment, smart manufacturing technologies and downstream applications across the aluminium value chain.

 

Sources:

International Energy Agency (IEA) — Energy Efficiency 2025; Energy Technology Perspectives 2026; Electricity 2026; Industrial Competitiveness Survey; Innovation Gaps

Empresa de Pesquisa Energética (EPE) — Brazilian Energy Balance 2026

Brazilian Ministry of Mines and Energy (MME) — PotencializEE Programme

Confederação Nacional da Indústria (CNI) — PotencializEE Programme Updates

International Aluminium Institute (IAI) — Aluminium Recycling Energy Data