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1、 U.S.Aluminum Manufacturing:Industry Trends and Sustainability October 26,2022 Congressional Research Service https:/crsreports.congress.gov R47294 Congressional Research Service SUMMARY U.S.Aluminum Manufacturing:Industry Trends and Sustainability Aluminuma lightweight,ductile,malleable,and corrosi

2、on-resistant metalis a major component used in a wide range of consumer,industrial,and technological goods,including aircraft,building materials,motor vehicles,and several types of defense and military equipment.The aluminum industry comprises three segments:upstream,secondary or recycled,and downst

3、ream.The upstream sector consists of mining bauxite,refining it to produce alumina,and smelting it to yield primary aluminum.Secondary aluminum is derived from recycled scrap metal.The downstream sector uses both primary and secondary aluminum to produce a variety of aluminum products.Through 2000,t

4、he United States ranked as the worlds largest producer of primary aluminum.In 2021,the United States accounted for less than 2%of global primary aluminum production and ranked as the ninth-largest primary aluminum producing country.Primary aluminum smelting is highly energy-intensive,with electricit

5、y estimated to account for up to 40%of production costs.Consequently,a major reason for the decline in U.S.primary aluminum production is that the United States is a relatively high-cost producer.The worlds leading producers of primary aluminum are generally countries with comparatively low energy c

6、osts,including Canada,Russia,and the United Arab Emirates.By contrast,the United States is a major producer of secondary aluminum.In 2021,more than 75%of domestic supply came from secondary smelters.Secondary aluminum production is often more economically tenable than primary production,as it is app

7、roximately 95%less energy-intensive than primary smelting.Secondary aluminum often has significant impurities,as it is derived from recycled products or scrap.Thus,manufacturers of components used in electronics and aerospace manufacturing often favor primary aluminum meeting specified purity standa

8、rds.Many defense-related products must comply with particularly high purity standards.At present,the United States has one active smelter that produces aluminum of sufficient purity for use in military aircraft,as well as lightweight armor plating found in many defense ground and weapon systems.The

9、greatest aluminum-related security concern regarding defense requirements appears to be the domestic availability of specific high-purity aluminum alloys,which can be derived from primary aluminum.The U.S.and Canadian aluminum industries are highly integrated,as each market is a major trading partne

10、r of the other across the aluminum value chain.In 2021,more than 75%of Canadian production went to the United States,while roughly half of U.S.downstream products were exported to Canada.U.S.primary aluminum smelters operated at 55%of the industrys rated production capacity in 2021,compared with 95%

11、in Canada and 88%globally.Over half of global primary aluminum smelting capacity is in China,which has become the worlds leading producer in most segments of the aluminum value chain over the past two decades.Excess capacity in the aluminum sector has been a growing concern for domestic producers.Th

12、e Organisation for Economic Co-operation and Development found that the global aluminum industry received up to$70 billion in government support between 2013 and 2017,with the large majority of support concentrated in China and countries of the Gulf Cooperation Council.In addition to being an energy

13、-intensive process,aluminum manufacturing contributes approximately 2%to global greenhouse gases(GHG),equivalent to roughly 1.1 billion tons of carbon dioxide.More than half of GHG emissions related to aluminum manufacturing come from the generation of electricity used in primary aluminum smelting.A

14、 transition to carbon-neutral aluminum is likely to require significant capital investment in decarbonizing the electrical grid and in specific technologies used in primary smelting and recycling.P.L.117-169(commonly referred to as the Inflation Reduction Act of 2022),signed into law on August 16,20

15、22,established the Advanced Industrial Facilities Deployment Program in which the Department of Energy is expected to provide financial assistance to producers and production facilities of a variety of heavy manufacturing industries,including aluminum,that use advance technologies in manufacturing p

16、rocesses that effectively reduce GHG emissions.This could incentivize producers to invest further in decarbonizing specific production assets in aluminum manufacturing.R47294 October 26,2022 Christopher D.Watson Analyst in Industrial Organization and Business U.S.Aluminum Manufacturing:Industry Tren

17、ds and Sustainability Congressional Research Service Contents Introduction.1 The Aluminum Manufacturing Process.1 Domestic Production.2 Primary Aluminum.2 Secondary and Downstream Aluminum.5 The Aluminum Market.6 Employment and Wages.8 Trade Measures,Regulatory Support,and Global Excess Capacity.9 P

18、rice Determination.12 National Security Concerns.13 Decarbonizing Aluminum Manufacturing.14 Challenges of Decarbonizing.16 Considerations for Congress.17 Figures Figure 1.Aluminum Sources and Uses.2 Figure 2.U.S.and Canadian Primary Aluminum Production.3 Figure 3.U.S.Primary Aluminum Smelters,2021.4

19、 Figure 4.U.S.Aluminum Production and Consumption.7 Figure 5.U.S.Aluminum Manufacturing Employment.8 Figure 6.Global Primary Aluminum Production,2021.11 Contacts Author Information.19 U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 1 Introduction Congress

20、 has long been concerned with the health of the U.S.manufacturing base.One component of this base is aluminuma lightweight,ductile,malleable,and corrosion-resistant metal.Aluminum is used in a wide range of consumer,industrial,and technological goods,including aircraft,building materials,motor vehic

21、les,and many types of defense and military equipment.This report provides an overview of factors affecting aluminum production in the United States,including energy costs,trade and regulatory issues,and demand.It also examines national security concerns tied to aluminum production and efforts to red

22、uce the industrys greenhouse gas(GHG)emissions.The report concludes with a discussion of selected issues that may be of interest to Congress.The Aluminum Manufacturing Process The aluminum sector comprises three segments:The upstream sector,which includes the mining of bauxite,the refining of bauxit

23、e into alumina(aluminum oxide),and the smelting of alumina to yield primary aluminum.The molten aluminum is cast into ingots,billets,or slabs,collectively referred to as unwrought aluminum.Secondary aluminum is derived from recycled scrap metal.Secondary production involves smelting both old scrap r

24、ecovered from finished products,such as cans and auto parts,and new scrap,material left over from processing aluminum into consumer or industrial products.Similar to primary aluminum,secondary aluminum typically is cast into unwrought shapes.The downstream sector uses primary or secondary aluminum t

25、o make aluminum products,which may then be used in the manufacture of motor vehicles,construction materials,consumer durables,and other products.Wrought aluminum consists of downstream products that are worked in solid form by rolling,drawing,extruding,forging,or other mechanical processing.These ar

26、e known commonly as semi-finished or mill products.Wrought aluminum can be resmelted and combined with alloying elements,such as copper,silicon,and zinc,to create metals with unique properties that may be necessary for specific applications.Figure 1 depicts aluminum sources and their uses.Generally,

27、primary aluminum production is undertaken by vertically integrated holding companies that control bauxite mines,alumina refineries,smelting facilities,and in some instances,rolling and processing mills.This model affords producers insulation from price fluctuations and helps secure raw material supp

28、ly.The secondary aluminum segment consists of smelting facilities and attached rolling mills that produce finished aluminum products from semi-finished aluminum.The downstream segment represents the largest component of the domestic aluminum industry,consisting of dozens of firms that produce flat-r

29、olled and extruded products.1 1 Jameson Ayers,Aluminum Manufacturing in the US,IBISWorld,October 2022,p.25.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 2 Figure 1.Aluminum Sources and Uses Source:CRS,adapted from NERA Economic Consulting,Impacts of Pot

30、ential Aluminum Tariffs on the U.S.Economy,June 2017,p.1.Domestic Production Primary Aluminum The U.S.and Canadian aluminum industries are highly integrated.The two markets are major trading partners with one another across the aluminum value chain.The large majority of Canadian unwrought aluminum g

31、oes to the United States.Roughly half of U.S.semi-finished aluminum products are exported to Canada.In the context of domestic production,the linkage between the two countries industries is significant,specifically regarding the production of primary aluminum and downstream fabrication.In 2021,the U

32、nited States produced 908,000 metric tons of primary aluminum,significantly below peak domestic output of 5.1 million metric tons in 1980.2 Through 2000,the United States ranked as the worlds top producer of primary aluminum,but it had slipped to the ninth-largest by 2021,accounting for less than 2%

33、of global primary aluminum production.Canada is the worlds fourth-largest primary aluminum producing country,accounting for 5%of global output in 2021.Combined U.S.-Canadian primary aluminum production declined 33%between 2000 and 2016 but has been relatively stable since 2016(Figure 2).U.S.primary

34、aluminum smelting capacity was 1.64 million metric tons in 2021.Domestic primary smelters operated at 55%of rated production capacity.Canadian smelters,by contrast,used nearly all of their 3.27 million metric tons of capacity in 2021.One domestic producer,Alcoa Corp.,has three primary smelters in Ca

35、nada and is estimated to account for almost one-third of that countrys total primary smelting capacity.3 Globally,primary aluminum smelters operated at 88%of rated capacity in 2021.2 The Aluminum Association,Industry Statistics,North American Primary Aluminum Production;and U.S.Bureau of Mines,Miner

36、al Yearbook:Metals and Minerals 1980(Washington,DC:USGPO,1981).3 Alcoa Corporation,Form 10-K for the year ending December 31,2021,p.6;and U.S.Geological Survey(USGS),Mineral Commodity Summaries,“Aluminum Statistics and Information,”January 2022.U.S.Aluminum Manufacturing:Industry Trends and Sustaina

37、bility Congressional Research Service 3 Figure 2.U.S.and Canadian Primary Aluminum Production Sources:The Aluminum Association,Industry Statistics,North American Primary Aluminum Production;and U.S.Geological Survey(USGS),“Aluminum Statistics and Information.”Bauxitethe raw material used by primary

38、smeltersis largely sourced overseas.Bauxite reserves are heavily concentrated in Australia,Guinea,and Vietnam.In 2021,the United States imported 3.6 million metric tons of bauxite;about 70%was refined into alumina used by primary smelters,while the remainder was used in products such as abrasives,ce

39、ment,and chemicals.4 Import sources for both mined bauxite and alumina include Australia,Brazil,and Jamaica.A major reason for the decline in U.S.primary aluminum production capacity is that the United States is a relatively high-cost producer.Primary aluminum smelting is highly energy-intensive,wit

40、h electricity estimated to account for up to 40%of the cost.5 In 2021,Alcoa reported that electric power represented approximately 31%of the companys primary aluminum production costs.6 Century Aluminum Companychiefly a domestic producercites electricity as the companys single largest operating cost

41、.7 Generally,the worlds leading producers are countries with lower energy costs,including Canada,Russia,and the United Arab Emirates(UAE).According to the World Bank,one kilowatt-hour of electricity cost,on average,$0.163 in the United States in 2019 compared with$0.123 in Canada,$0.081 in Russia,an

42、d$0.109 in the UAE.8 In 2000,12 companies operated 23 primary smelting facilities in the United States;by the close of 2021,six primary smelters were operated by three firmsAlcoa,Century Aluminum,and Magnitude 7 Metals LLC(Figure 3).9 In April 2020,Alcoa announced that it would curtail indefinitely

43、its Intalco smelting facility in Ferndale,WA,reducing industry production capacity 4 USGS,Mineral Commodity Summaries,“Bauxite and Alumina Statistics and Information,”January 2022.5 The Aluminum Association,Primary Production 101,at https:/www.aluminum.org/primary-production-101.6 Alcoa Corporation,

44、Form 10-K for the year ending December 31,2021,pp.7,14,and 67.7 Century Aluminum Company,Form 10-K for the year ending December 31,2021,pp.22,51,and 58;and Century Aluminum Company,Form 10-K for the year ending December 31,2019,p.40.8 World Bank,“GovData360,Getting electricity:Price of electricity,”

45、at https:/govdata360.worldbank.org/indicators/h6779690b?country=BRA&indicator=42573&viz=line_chart&years=2014,2019.9 USGS,Mineral Commodity Summaries,“Aluminum Statistics and Information,”January 2001 and January 2022.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Resear

46、ch Service 4 by 230,000 metric tons.10 In July 2022,Alcoa announced that it would partially curtail its Warrick smelter in Evansville,IN,by 54,000 metric tons citing operational challenges.11 Alcoa had announced the permanent closure of the Warrick smelter in March 2016 citing similar reasons;it res

47、tarted three of the five smelting potlines12 there in 2018,representing approximately 60%of the facilitys production capacity.13 Figure 3.U.S.Primary Aluminum Smelters,2021 Annual production capacity in metric tons(MT)Sources:CRS using location of smelters obtained from Homeland Infrastructure Found

48、ation-Level Data,Nonferrous Metal Processing Plants.Data for smelter production capacities are based on Alcoa Corporation,Form 10-K for the year ending December 31,2021,pp.6-7;Century Aluminum Company,Form 10-K for the year ending December 31,2021,pp.2-3;and USGS,“Aluminum Statistics and Information

49、.”Note:Alaska and Hawaii are not shown on the map and no primary smelters are located in either state.Much of the U.S.aluminum industry developed in areas where two federally owned utilities,the Bonneville Power Administration and the Tennessee V alley Authority,furnished electricity at low cost.As

50、those entities have raised electricity prices over time,most of the aluminum smelters have closed,and imports now meet a large share of domestic demand.In addition to Alcoas three primary smelters in Canada,it has one in Iceland and two in Norway,while Century Aluminum has one smelter in Iceland;in

51、each case,the smelter has access to relatively inexpensive hydroelectric or geothermal power.Canadian imports meet a large share of U.S.demand for 10 Alcoa Corporation,Form 10-K for the year ending December 31,2021,p.80.11 Alcoa Corporation,“Alcoa Announces Partial Curtailment at Warrick Smelter in

52、Indiana,”press release,July 1,2022,at https:/ Smelting potlines are comprised of an interconnected row of electrolytic reduction pots used to smelt alumina into aluminum.13 Alcoa Corporation,Form 10-K for the year ending December 31,2016,p.17;and Alcoa Corporation Form 10-K for the year ending Decem

53、ber 31,2018,p.13.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 5 unwrought aluminum.By contrast,smelters in both Iceland and Norway almost exclusively sell to customers in Europe.14 U.S.primary smelters use older and less energy-efficient technologies t

54、han newer facilities abroad.The newest U.S.primary aluminum facility is Century Aluminums Mt.Holly,SC,plant,which opened in 1980.15 Primary smelting requires relatively large capital investments.A new smelter,for example,may represent at least a$1 billion investment while taking a minimum of three y

55、ears to build and bring online.16 Some domestic producers have chosen to invest in countries with lower energy costs:no new primary smelters are under construction in the United States.However,Alcoa is in negotiations to sell its closed Intalco primary smelter in Ferndale,WA,to Blue Wolf Equity Part

56、ners,which expects to spend roughly$175 million in modernizing the plant with new technology to produce 240,000 metric tons of aluminum annually.17 The transaction may depend on Blue Wolfs ability to reach a power supply agreement with the Bonneville Power Administration.Secondary and Downstream Alu

57、minum The United States is a major producer of secondary aluminum.Since the early 2000s,aluminum derived from scrap has represented an increasing share of total U.S.aluminum output.Secondary aluminum accounted for 78%of the 4.1 million metric tons of aluminum produced by U.S.smelters in 2021.Of that

58、 secondary production,53%came from new scrapmaterial left over from primary smeltingand 47%from old scrap.Secondary aluminum producers face a different cost structure from primary producers.Secondary production is roughly 95%less energy-intensive than primary production,18 and the capital cost of a

59、secondary smelter is comparatively low.Unlike primary production,secondary aluminum production in the United States has generally increased over time and is over twice the level of the early 1980s.In May 2022,Novelis Inc.,the U.S.subsidiary of an India-based secondary and downstream producer,announc

60、ed an investment of$2.5 billion in a new secondary smelter with an attached rolling mill in Bay Minette,AL,with the ability to produce 600,000 tons annually.19 Over the past decade,the aluminum industry has invested more than$6.5 billion in new facilities and expansions,with the vast majority of suc

61、h investments directed toward secondary smelting and the downstream segment.20 14 International Trade Centre,“Trade MapTrade statistics for international business development,”exports of unwrought aluminum(HS 7601)for Iceland and Norway.For the underlying data,see https:/www.trademap.org/Index.aspx.

62、15 Century Aluminum Company,“Mt.Holly,SC,”at https:/ Century Aluminum Company,Form 10-K for the year ending December 31,2021,p.3.16 Kirk Maltais,“US aluminium industry ponders case for building new smelter,”Fastmarkets MB,April 3,2018,at https:/ Joshua Partlow and Steven Mufson,“A factory wants to r

63、eopen making green aluminum.Now it just needs clean energy,”Washington Post,June 7,2022,at https:/ The Aluminum Association,Secondary Production 101,at https:/www.aluminum.org/secondary-production-101.19 Novelis,Inc.,“Novelis to Build$2.5 Billion Low-Carbon Aluminum Recycling and Rolling Plant,”pres

64、s release,May 11,2022,at https:/ The Aluminum Association,“$2.5 Billion Low Carbon Recycling&Rolling Plant Investment Meets Growing U.S.Aluminum Demand,”press release,May 11,2022,at https:/www.aluminum.org/25-billion-low-carbon-recycling-rolling-plant-investment-meets-growing-us-aluminum-demand.U.S.

65、Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 6 The downstream sector is by far the largest segment of the U.S.aluminum industry.Downstream producers accounted for over 75%of the industrys$31.5 billion earnings in 2020.21 There are dozens of downstream prod

66、uction facilities scattered across the United States,largely concentrated in the Midwest and Southeast.The largest downstream producers in the United States include Arconic Corp.,Constellium SE,Kaiser Aluminum Corp.,Novelis,and Sapa Extrusions.Most major downstream producers rely on a combination of

67、 primary and secondary aluminum in their manufacturing operations.The amount of primary versus secondary aluminum used varies according to the performance requirements of the final product.Aluminum producers often must manage the properties of the aluminum alloy precisely to meet customer specificat

68、ions,and this often favors the use of primary aluminum.The Aluminum Market Demand for aluminum is cyclical and largely depends on the health of the manufacturing sector,particularly pertaining to aviation products,motor vehicles,electrical equipment and machinery,packaging,and construction materials

69、.In 2021,demand for aluminum in the United States totaled 4.3 million metric tons,up 8%from 2020even as the Coronavirus Disease 2019(COVID-19)pandemic contributed to curtailments and reduced production at facilities of aluminum-consuming industries.Domestic consumption remains below the recent peak

70、of 5.7 million metric tons in 2017(Figure 4).The three largest domestic end markets for aluminum in 2021 were transportation equipment,packaging,and building and construction.These end markets accounted for a combined 74%of U.S.aluminum consumption.22 Since the mid-2010s,U.S.aluminum demand has been

71、 generally flat.However,CRU International,a consulting company,forecasts that demand for aluminum in North America will expand by 5.1 million metric tons,or 45%,between 2020 and 2030.CRU estimates that roughly half of this growth will occur in the transportation sector as North America becomes a maj

72、or electric vehicle production location.23 Demand for packaging and construction combined is expected to increase by 27%.The Aluminum Associationthe domestic industrys largest trade groupreported that North American(U.S.and Canadian)aluminum demand grew by 6.6%through the first half of 2022,driven b

73、y packaging among other segments.24 21 Bureau of the Census,“Annual Survey of Manufacturers,”at https:/data.census.gov/cedsci/table?q=AM1831BASIC&n=3313%3A331313%3A331314%3A331315%3A331318.22 USGS,Mineral Commodity Summaries,“Aluminum Statistics and Information,”January 2022.23 CRU International,Opp

74、ortunities for aluminum in a post-Covid economy,January 28,2022,p.20,at https:/international-aluminium.org/resource/opportunities-for-aluminium-in-a-post-covid-economy/.24 The Aluminum Association,“North American Aluminum Demand Up 6.6%Through First Half of 2022,”press release,August 30,2022,at http

75、s:/www.aluminum.org/north-american-aluminum-demand-66-through-first-half-2022.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 7 Figure 4.U.S.Aluminum Production and Consumption Sources:The Aluminum Association,Industry Statistics,U.S.Primary Aluminum Prod

76、uction;and USGS,“Aluminum Statistics and Information.”Note:Production includes primary and secondary aluminum.As discussed above,the U.S.and Canadian aluminum industries are heavily interconnected.In 2021,imports supplied 44%of the U.S.aluminum market,up from 39%in 2020.25 More than half of U.S.alum

77、inum imports in 2021 came from Canada.Canadian output of primary aluminum reached an estimated 3.13 million metric tons in 2021,more than three times that of the United States,with 81%of that production exported to the United States.26 Mexico is not a major producer of aluminum but consumes large vo

78、lumes of North American aluminum.Through the first half of 2022,the United States exported 219,000 metric tons of semi-finished aluminum products,with 59%going to Canada and 33%to Mexico.During the same period,U.S.imports of unwrought aluminum amounted to 2.14 million metric tons,with more than 60%c

79、oming from Canada.27 Over the past decade,58%-69%of domestic supply of aluminum was exported each year.An important reason for the imbalance between production and consumption is that the United States is a major exporter of aluminum scrap,which represented 72%of total export volume in 2021.Mexico,M

80、alaysia,and Canada were the three largest export markets,in that order,accounting for over half of total aluminum export volume from U.S.mills.28 Canada and Mexico import the vast majority of U.S.non-scrap aluminum exports,including semi-finished products as well as small volumes of unwrought alumin

81、um and alloys.Global demand for semi-finished aluminum products is expected to increase up to 80%by 2050.29 This could be significant for the prospects of U.S.producers,particularly for exports of aluminum 25 USGS,Mineral Commodity Summaries,“Aluminum Statistics and Information,”January 2022.26 The

82、Aluminum Association,Industry Statistics,North American Primary Aluminum Production;and U.S.Department of Commerce,“U.S.Aluminum Import Monitor,”accessed July 28,2022.27 USGS,Mineral Industry Surveys,“Aluminum Statistics and Information,”Table 8,June 2022.28 USGS,Mineral Industry Surveys,“Aluminum S

83、tatistics and Information,”Table 9,December 2021.29“World aluminium industry must cut emissions by 77%by 2050-IAI,”Reuters,March 16,2021,at https:/ Manufacturing:Industry Trends and Sustainability Congressional Research Service 8 scrap and for semi-finished products.Moreover,the United States-Mexico

84、-Canada Agreement(USMCA),in effect since July 2020,requires 70%North American aluminum content for automobiles and auto parts to qualify for duty-free trade.This could increase demand for U.S.and Canadian aluminum over time.30 Employment and Wages Direct employment in U.S.aluminum manufacturing has

85、declined 38%,from 91,388 workers in 2001 to 56,515 workers in 2021.31 However,that decline occurred largely between 2001 and 2008;employment in the industry as a whole has been generally flat in recent years(Figure 5).In 2021,fewer than one in four workers in aluminum manufacturing were employed in

86、primary or secondary aluminum smelting.The majority of jobs in aluminum manufacturing are at downstream sector facilities that make plate,sheet,extruded,and rolled products.The U.S.Bureau of Labor Statistics(BLS)projects employment in aluminum manufacturing to shrink approximately 6%between 2021 and

87、 2031.32 Figure 5.U.S.Aluminum Manufacturing Employment Source:Bureau of Labor Statistics,Quarterly Census of Employment and Wages,North American Industry Classification System(NAICS)codes 331313Alumina Refining and Primary Aluminum Production;331314Secondary Smelting and Alloying of Aluminum;331315

88、Aluminum Sheet,Plate,and Foil Manufacturing;and 331318Other Aluminum Rolling,Drawing,and Extruding.In 2021,workers in primary aluminum smelting and manufacturing of plate,sheet,and foil were among the aluminum sectors highest earners,with annual average wages of$84,164 and#:text=LONDON%2C%20March%20

89、16%20(Reuters),Aluminium%20Institute%20said%20on%20Tuesday.30 Office of the U.S.Trade Representative(USTR),The United States-Mexico-Canada Agreement Fact Sheet:Automobiles and Automotive Parts,accessed June 21,2022,at https:/ustr.gov/sites/default/files/files/Press/fs/USMCA/USMCA-Autos_and_Auto_Part

90、s.pdf.31 Bureau of Labor Statistics(BLS),Quarterly Census of Employment and Wages,North American Industry Classification System(NAICS)3313Alumina and Aluminum Production and Processing,at http:/www.bls.gov/qcew.32 BLS,Employment and Output by Industry,Table 2.11,accessed September 8,2022,at https:/w

91、ww.bls.gov/emp/tables/industry-employment-and-output.htm.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 9$88,136,respectively.33 The secondary aluminum sector paid an annual average wage of$69,319,while workers involved in aluminum rolling and extruding

92、were paid an average of$63,639 annually.34 As a whole,the aluminum industrys annual average pay was$74,149,3%lower than the annual average of$76,580 for all manufacturing.Trade Measures,Regulatory Support,and Global Excess Capacity Since the early 2010s,the United States has imposed or negotiated re

93、straints on imports of a variety of downstream aluminum products in response to complaints by aluminum producers and industry associations that the U.S.industry was injured or threatened with injury by imports sold below fair market value(“dumped”),subsidized,or otherwise supported by unfair trade p

94、ractices.In addition,the U.S.Department of Commerce has self-initiated some trade remedy proceedings involving aluminum.The most recent round of trade actions began in March 2018 when the Trump Administration imposed a 10%tariff on certain aluminum products from virtually all countries under Section

95、 232 of the Trade Expansion Act of 1962,35 which allows restrictions,such as tariffs or import quotas,on imports that have been found to harm national security.36 The Trump Administrations stated objective was to reduce import volumes to a level that would enable the domestic industry to operate at

96、an average of 80%or more of production capacity.37 An additional aim was to raise the price of imported aluminum to encourage domestic producers to restart idled capacity and expand employment.38 In October 2021,the United States and the European Union(EU)reached an agreement under which the Section

97、 232 tariffs on imports from EU countries were replaced with a tariff-rate quota allowing a specified quantity of aluminum imported from the EU to enter the United States duty-free each year.39 The United States reached a similar agreement with the United Kingdom in March 2022.40 33 BLS,Quarterly Ce

98、nsus of Employment and Wages,NAICS 331313Alumina Refining and Primary Aluminum Production,and 331315Aluminum Sheet,Plate,and Foil Manufacturing.34 BLS,Quarterly Census of Employment and Wages,NAICS 331314Secondary Smelting and Alloying of Aluminum,and 331318Other Aluminum Rolling,Drawing,and Extrudi

99、ng.35 19 U.S.C.1862,as amended.36 At the same time,Section 232 tariffs were applied to steel imports at a 25%rate.In May 2019,Canada and Mexico were exempted permanently from the Section 232 tariffs.Australia is not subject to any import restrictions;Argentina is subject to an annualized quota in li

100、eu of the tariffs as are individual product imports that receive a product exclusion from the U.S.Department of Commerce.37 Bureau of Industry and Security,The Effect of Imports of Aluminum on the National Security,2018,p.107.38 Ibid.,p.104.39 Under the agreement,the United States will exempt up to

101、18,000 metric tons(MT)of unwrought aluminum under two product categories and 366,000 MT of semi-finished(wrought)aluminum under 14 product categories imported from the European Union from Section 232 tariffs each year.If imports exceed this quantity,then the Section 232 duties would be reimposed for

102、 the remainder of the calendar year.USTR,“Joint US-EU Statement on Trade in Steel and Aluminum,”press release,October 31,2021,at https:/ustr.gov/sites/default/files/files/Statements/US%20232%20EU%20Statement.pdf.40 The agreement with the United Kingdom allows 900 MT of unwrought aluminum under two p

103、roduct categories and 11,400 MT of semi-finished(wrought)aluminum,other than foil(Harmonized System Heading 7607),under 12 product categories to enter the United States duty-free each year,effective June 1,2022.For aluminum foil(7607),the agreement allows 9.3 TMT(thousand metric tons)under two produ

104、ct categories to enter duty-free each year.USTR,“Announcement of Action on UK Imports Under Section 232,”March 22,2022,at https:/merce.gov/sites/default/files/2022-03/UK232-US-Statement.pdf.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 10 Separately,the

105、re are numerous antidumping(AD)and countervailing duty(CVD)orders imposing punitive duties on aluminum and aluminum products.Most of these orders were put into place after the Trump Administrations imposition of Section 232 duties.AD or CVD duties may be imposed when imports are found to have been s

106、old below cost in the U.S.market or subsidized and threaten to injure a domestic industry.41 As of September 2022,34 AD or CVD orders concerning aluminum were in force,including many on semi-finished aluminum products imposed under the Biden Administration in 2021.42 In June 2021,the International T

107、rade Administration in the Department of Commerce implemented the aluminum import monitoring and analysis system to track imports of aluminum products and provide an early warning of import surges.43 The Section 232 restrictions are intended to raise domestic prices of the covered products,leaving d

108、ownstream manufacturers that use those products to face higher input costs.Consequently,some U.S.manufacturers claimed to have difficulty competing with imported finished or derivative products and sought AD/CVD protection as wella development some economists have referred to as“cascading protection

109、.”44 A report from the Economic Policy Institute estimates that Section 232 measures have provided relief to domestic aluminum producers through improved output,employment,and capital investments while creating no adverse effects for aluminum-consuming industries,such as motor vehicle parts,construc

110、tion goods,and canned beverages.45 By contrast,research from HARBOR Aluminum on behalf of the Beer Institute estimates that between March 2018 and February 2022,Section 232 aluminum tariffs cost the U.S.beverage industry$1.4 billion,while amounting to$463 million in 2021.46 Data from BLS show little

111、 change in employment at secondary smelters and at aluminum sheet,plate,and foil mills since 2018,while employment in primary aluminum production and at rolling,drawing,and extrusion plants has declined.On balance,the net effect on employment within the aluminum industry seems to be relatively minor

112、.The global aluminum sector has seen major changes over the last two decades with Chinas rise to be the leading producer in most segments of the aluminum value chain.Global output of primary aluminum has more than doubled,from 23,900 million metric tons in 2000 to 68,000 million metric tons in 2021.

113、The majority of global smelting capacity is in China,which accounted for 57%of global primary aluminum output in 2021;combined,the United States and Canada represented 6%(Figure 6).41 For more information on antidumping(AD)and countervailing duty(CVD)orders,see CRS Report R46296,Trade Remedies:Antid

114、umping,by Christopher A.Casey;and CRS Report R46882,Trade Remedies:Countervailing Duties,by Christopher A.Casey and Liana Wong.42 Of the 34 AD/CVD orders covering aluminum,26 were introduced in 2021,affecting imports from Armenia,Bahrain,Brazil,China,Croatia,Egypt,Germany,India,Indonesia,Italy,Oman,

115、Romania,Russia,Serbia,Slovenia,South Africa,Spain,Taiwan,and Turkey.U.S.Department of Commerce,“AD/CVD Proceedings,”accessed September 6,2022,at https:/www.trade.gov/data-visualization/adcvd-proceedings.43 For information about the Aluminum Import Monitoring and Analysis(AIM)system,see International

116、 Trade Administration,“Industry Import Monitoring and Analysis,”at https:/www.trade.gov/aluminum.44 Chad P.Bown,“Trumps steel and aluminum tariffs are cascading out of control,”Peterson Institute for International Economics,February 4,2020,at https:/ Adam S.Hersh and Robert E.Scott,“Aluminum produci

117、ng and consuming industries have thrived under U.S.Section 232 import measures,”Economic Policy Institute,May 25,2021,at https:/www.epi.org/publication/aluminum-producing-and-consuming-industries-have-thrived-under-u-s-section-232-import-measures/.46 Beer Institute,“New Research Shows the Tariffs on

118、 Aluminum Have Cost the U.S.Beverage Industry$1.4 Billion,”press release,April 14,2022,at https:/www.beerinstitute.org/press-releases/new-research-shows-the-tariffs-on-aluminum-have-cost-the-u-s-beverage-industry-1-4-billion/.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressiona

119、l Research Service 11 Figure 6.Global Primary Aluminum Production,2021 Top 10 producing countries Source:USGS,“Aluminum Statistics and Information.”Note:USGS estimates that in 2021,global primary aluminum smelting capacity was 77,000 million metric tons.The Organisation for Economic Co-operation and

120、 Development(OECD)estimates that primary smelting capacity in China amounted to roughly 48.7 million tons in 2018.47 The OECD reports that excess capacity in the aluminum sector is hard to measure,as reliable capacity information may not be available for producers that are not publicly listed on sto

121、ck exchanges.The Chinese government has acknowledged that its aluminum sector,which is in part state-owned,suffers from excess capacity and indicated as of 2019 that continued efforts to reduce inventory,cut overcapacity,and achieve a balance in supply and demand remain priorities.48 In addition,OEC

122、D economists found that subsidies and other market-distorting practices,particularly in China and the countries of the Gulf Cooperation Council(GCC),contribute to excess capacity and impact global competition in the aluminum sector.49 The research looked at 17 of the industrys largest firms,represen

123、ting more than half of global smelting capacity,which the OECD estimates received up to$70 billion in total government support between 2013 and 2017.Although all 17 firms received some form of support,five recipients,all Chinese,received 85%of all support.U.S.-based Alcoa was one of the 17 firms,hav

124、ing received approximately$1.5 billion in the form of nonfinancial support,chiefly through energy subsidies coming overwhelmingly from Canada and a GCC country(likely Saudi Arabia,where it has a joint venture).50 A recent analysis by several international organizations,including the OECD,estimated t

125、hat from 2014 to 2018,global aluminum firms benefited from subsidized intermediate 47 Organisation for Economic Co-operation and Development(OECD),“Measuring distortions in international markets:the aluminium value chain,”OECD Trade Policy Papers,no.218,OECD Publishing,Paris,2019,p.53,at http:/dx.do

126、i.org/10.1787/c82911ab-en.48 Ibid.,p.51.49 The Gulf Cooperation Council includes Saudi Arabia,Kuwait,the United Arab Emirates,Qatar,Bahrain,and Oman.Ibid.,pp.6,9.50 Ibid.,pp.13-14.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 12 inputs,including energy,

127、valued at$2.5 billion and from below-market borrowings of$8 billion per year.51 In April 2021,the Aluminum Association unveiled a policy document,A Trade Policy Framework for the U.S.Aluminum Industry.The framework expresses the associations view of global excess capacity as a significant challenge,

128、urging the Biden Administration to engage in multilateral efforts to address market-distorting industrial policies with an emphasis on China.52 Unlike the steel sector,no OECD or other multinational forum has been established exclusively to monitor global excess capacity in the aluminum sector.Price

129、 Determination Aluminum is a globally traded commodity,and its price is effectively determined by the price of futures contracts traded on the London Metal Exchange(LME).Regional and value-added premiums,such as the Midwest Premium,typically are added to LME prices to establish the base price of alu

130、minum in the United States.This price is usually higher than the LME price,reflecting the cost of delivery to LME-approved warehouses in the United States,as well as U.S.demand conditions.Through the first half of 2022,for example,the average U.S.price for aluminum was$3,507 per metric ton,above the

131、 LME price,which averaged$2,789 per metric ton during the same period.53 At that time,the LME price was at its highest level since 2008.According to S&P Global,aluminum prices were at record highs due to limited supply resulting from production curtailments,modification of Section 232 tariffs,demand

132、 growth in China,reduced Chinese exports of primary semi-finished aluminum,and economic sanctions on Russia.54 Reliance on LME price benchmarks has been blamed for unreasonably high U.S.aluminum prices.In 2014,the Senate Permanent Subcommittee on Investigations examined allegations that certain fina

133、ncial institutions,notably investment bank Goldman Sachs,had acquired LME-approved warehouses and used their control to delay delivery of metal to buyers,thereby creating artificial supply shortages that inflated aluminum prices.55 Between 2010 and 2014,the average queue time to receive aluminum fro

134、m an LME-approved warehouse in the United States went from roughly 40 days to over 600 days;during the same period,the Midwest Premium rose from approximately$134 per metric ton of aluminum to slightly above$450 per metric ton.56 The subcommittees investigation found a broad consensus that the longe

135、r queue times had led to a wider gap between LME prices and U.S.prices,but there 51 IMF et al.,Subsidies,Trade,and International Cooperation,OECD Publishing,Paris,2022,pp.14-16,at https:/doi.org/10.1787/a4f01ddb-en.52 The Aluminum Association,A Trade Policy Framework for the U.S.Aluminum Industry,at

136、 https:/www.aluminum.org/sites/default/files/2021-10/TAA_Trade%20Framework-FINAL.pdf.53 USGS,Mineral Industry Surveys,“Aluminum Statistics and Information,”Table 6,June 2022.54 S&P Global Commodity Insights,“Aluminum prices hit 13-year high on supply tightness,concerns,”February 10,2022,at https:/ D

137、avid Kocieniewski,“A Shuffle of Aluminum,but to Banks,Pure Gold,”New York Times,July 20,2013,at https:/ U.S.Congress,Senate Committee on Homeland Security and Governmental Affairs,Permanent Subcommittee on Investigations,Wall Street Bank Involvement with Physical Commodities,113th Cong.,2nd sess.,No

138、vember 21,2014,pp.173,178-179.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 13 was disagreement as to whether the longer queue times resulted in a higher absolute level of aluminum prices for U.S.buyers.57 Litigation over claims that financial firms vio

139、lated antitrust laws by manipulating aluminum prices has persisted into this decade.In February 2021,a New York district court ruled in favor of defendants Goldman Sachs,JPMorgan Chase,and Glencorestating that many aluminum purchasers bought aluminum overwhelmingly from smelters such as Alcoa and Ri

140、o Tinto rather than directly from the defendants;therefore the purchasers did not qualify as efficient enforcers of antitrust laws and lacked standing to sue.58 Another case was decided in favor of Goldman Sachs and several others in June 2022 on similar grounds.59 National Security Concerns As seco

141、ndary aluminum is derived from recycled products or scrap,it often contains significant impurities.This makes it unsuitable for uses that require high and consistent quality.Manufacturers of components used in electronics and aerospace manufacturing often favor primary aluminum that meets specified

142、purity standards.Many defense-related products must comply with particularly high purity standards.Specialty alloys and materials used in wrought aluminum products often have enhanced mechanical properties,such as heighted electrical conductivity and corrosion resistance,which are greatly preferred

143、for aerospace and defense applications.However,military demand alone is insufficient to support domestic production of high-purity primary aluminum alloys.According to the Department of Defense(DOD),U.S.military requirements for aluminum represent approximately 3%of annual domestic production.60 The

144、 greatest aluminum-related security concern regarding defense requirements appears to be the availability of specific high-purity aluminum alloys,which can be derived from primary aluminum.The supply of high-purity aluminum is important to the production of high-performance aluminum alloys used in a

145、erospace and defense products.In addition,aluminum alloys are one of several energetic materials used in missile and munition systems,according to DOD.61 One active U.S.smelter produces aluminum of sufficient purity for use in military aircraft,as well as in the lightweight armor plating found in ma

146、ny defense ground and weapon systems.62 Centurys Hawesville,KY(Figure 3),smelter produces primary aluminum with a purity of 99.9%compared with standard-purity aluminum of 99.7%.Standard ingots can undergo further 57 Ibid.,p.180.58 In re Aluminum Warehousing Antitrust Litig.,520 F.Supp.3d 455(S.D.N.Y

147、.2021).59 Reynolds Consumer Prod.LLC v.Glencore AG,No.16-cv-0595(S.D.N.Y.June 3,2022)(order granting joint stipulation of dismissal with prejudice).60 Letter from James N.Mattis,Secretary of Defense,to Wilbur L.Ross Jr.,Secretary of Commerce,Memorandum for the Secretary of Commerce:Response to Steel

148、 and Aluminum Policy Recommendations,2018,at https:/merce.gov/sites/default/files/department_of_defense_memo_response_to_steel_and_aluminum_policy_recommendations.pdf.61 Department of Defense,Assistant Secretary of Defense for Industrial Base Policy,Industrial Capabilities Report to Congress,2020 An

149、nual Report,January 2021,pp.85-87,at https:/media.defense.gov/2021/Jan/14/2002565311/-1/-1/0/FY20-INDUSTRIAL-CAPABILITIES-REPORT.PDF.62 Bureau of Industry and Security,The Effect of Imports of Aluminum on the National Security,2018,p.3;and Adam S.Hersh and Robert E.Scott,Aluminum producing and consu

150、ming industries have thrived under U.S.Section 232 import measures,Economic Policy Institute,May 25,2021,at https:/www.epi.org/publication/aluminum-producing-and-consuming-industries-have-thrived-under-u-s-section-232-import-measures/.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Con

151、gressional Research Service 14 electrolysis processing,known as the Hoopes process,to reach an“ultra”purity grade of up to 99.99%.63 Centurys Hawesville smelter produced 172,000 tons of primary aluminum in 2021,64 with the large majority going to the commercial aerospace and electrical conductor mar

152、kets.With respect to defense requirements,this smelter is a major supplier of high-purity aluminum to downstream producers,including Arconic,Constellium,and Kaiser.These firms use high-purity alloys and materials to produce aluminum products for an array of advanced aerospace and defense application

153、s.In June 2022,Century announced that it would temporarily idle its high-purity smelter for up to a year due to rising energy prices.65 Downstream producer Arconic has the capability to produce high-purity aluminum from a standard ingot using a specific fractionalization crystallization process.66 C

154、anadian downstream producer Nature Alu manufactures aluminum ingots with an ultra-purity grade of 99.99%through a proprietary technology.The company states that it is the only North American manufacturer of high-purity aluminum that supplies the international market.67 It is unclear whether the Unit

155、ed States imports materials from this firm for use in military applications.The Department of Homeland Security has designated 16 critical infrastructure sectors in the United States.One of these,“critical manufacturing,”encompasses domestic production of primary metals,including aluminum,among othe

156、r materials.68 The Trump Administrations Section 232 aluminum report asserted that nearly all of the designated critical infrastructure sectors rely on aluminum products to accomplish their principal missions.69 Separately,the aluminum industrys broadest trade group has pushed for the designation of

157、 the aluminum industry as an“essential industry”to allow continuation of operations in the event of a federal emergency,such as was declared during the COVID-19 pandemic.70 Decarbonizing Aluminum Manufacturing The aluminum sector contributes approximately 2%to global GHGs,equivalent to roughly 1.1 b

158、illion tons of carbon dioxide.71 As global demand for aluminum is expected to increase up to 80%by 2050,the aluminum industry is facing pressure to develop low-carbon or carbon-neutral manufacturing processes.72 Aluminum producers,like firms in other industries,face increasing 63 Danilo C.Curtolo et

159、 al.,“High-and Ultra-High-Purity Aluminum,a Review on Technical Production Methodologies,”Metals,vol.11,no.1407(September 6,2021),p.4,at https:/ Century Aluminum Company,Form 10-K for the year ending December 31,2021,p.3.65 Century Aluminum,“Century Aluminum to Temporarily Idle Its Hawesville Smelte

160、r Due to Soaring Energy Prices;Issues WARN Notice to Employees,”press release,June 22,2022,at https:/ Bureau of Industry and Security,The Effect of Imports of Aluminum on the National Security,2018,p.30.67 See Nature Alu website,at https:/ Department of Homeland Security,Cybersecurity&Infrastructure

161、 Security Agency,“Critical Manufacturing Sector,”at https:/www.cisa.gov/critical-manufacturing-sector.69 Bureau of Industry and Security,The Effect of Imports of Aluminum on the National Security,2018,p.36.70 GlobalNewsWire,“American Aluminum an Essential Industry in a Moment of National Emergency,”

162、press release,March 19,2020,at https:/ International Aluminium Institute,Aluminium Sector Greenhouse Gas Pathways to 2050,September 2021,at https:/international-aluminium.org/resource/aluminium-sector-greenhouse-gas-pathways-to-2050-2021/.72 International Aluminium Institute,IAI releases aluminium s

163、ectors decarbonisation dataset in line with the U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 15 demands from customers and investors that they publicly disclose the GHG emissions throughout their supply chains and seek to reduce those emissions levels,

164、potentially placing producers with comparatively high emissionsnamely primary aluminum smeltersat a competitive disadvantage.73 Primary aluminum smelting generates direct emissions from the electrolysis of alumina using a carbon anode during smelting and from fuel combustion to produce heat and stea

165、m used in casting and fabrication.Direct emissions account for roughly 30%of total emissions from aluminum manufacturing.74 More than 60%of indirect GHG emissions related to aluminum manufacturing come from the generation of electricity used to refine bauxite ore into alumina and to smelt the alumin

166、a into aluminum.75 The emissions attributable to a particular producer may depend heavily on the power source.About 90%of Canadian aluminum is produced from hydroelectric power in Quebec,76 resulting in comparatively low GHG emissions per metric ton,whereas China,which relies predominantly on coal-f

167、ired electric generating plants,has much higher emissions per metric ton.77 The United States stands in the middle in terms of sectoral GHG emissions per ton.78 Secondary aluminums rising share of total domestic supply is chiefly responsible for the U.S.decline in average emissions per ton.U.S.produ

168、cers have also introduced process and technology improvements in aluminum smelting.The Aluminum Association asserts that the domestic industry reduced its GHG emissions by 59%between 2005 and 2018.79 However,annual domestic production of primary aluminum fell sharply during this period,from 2.48 mil

169、lion metric tons in 2005 to 897,000 metric tons in 2018,a decline of 64%.Given that over 90%of emissions from aluminum manufacturing comes from primary smelting,80 reduced primary smelting activity is likely to have been a major cause of decline in the sectors emissions.Secondary aluminum uses just

170、5%of the energy required for primary production,81 so to the extent that greater availability of secondary aluminum reduces demand for primary aluminum,the industrys emissions per metric ton could be expected to fall,even in the absence of changes to production methods.International Energy Agencys B

171、eyond 2 Degrees findings,September 9,2021,at https:/international-aluminium.org/iai-releases-aluminium-sectors-decarbonisation-dataset-in-line-with-the-international-energy-agencys-beyond-2-degrees-findings/.73 Primary aluminum smelting is also a major source of global perfluorocarbon(PFC)emissions,

172、a highly potent greenhouse gas.74 Mission Possible Partnership,Closing the Gap for Aluminium Emissions:Technologies to Accelerate Deep Decarbonization of Direct Emissions,December 2021,pp.5-6,at https:/missionpossiblepartnership.org/wp-content/uploads/2021/12/Closing-the-Gap-for-Aluminium-Emissions.

173、pdf.75 International Aluminium Institute,Aluminium Sector Greenhouse Gas Pathways to 2050,September 2021,at https:/international-aluminium.org/resource/aluminium-sector-greenhouse-gas-pathways-to-2050-2021/.76 Investissement Qubec,The Greenest Aluminum in the World,accessed July 20,2022,at https:/ A

174、li Hasanbeigi et al.,Aluminum Climate Impact:An International Benchmarking of Energy and CO2 Intensities,Global Efficiency Intelligence,February 2022,pp.3,16,and 19 at https:/ Ibid.,pp.3,15.79 The Aluminum Association,Aluminum Sector Snapshot:Environmental Reporting,April 2021,pp.1,5,at https:/www.a

175、luminum.org/sites/default/files/2021-10/Aluminum%20Association_Smart%20Sector%20Report.pdf.80 IEA,Aluminium,Paris,2022,at https:/www.iea.org/reports/aluminium.81 World Economic Forum,The answer to the aluminium industrys emissions issue?Aluminiums infinite recyclability,December 9,2021,at https:/www

176、.weforum.org/agenda/2021/12/aluminium-emissions-recycling-circular-economy/.U.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service 16 Challenges of Decarbonizing A transition to carbon-neutral aluminum is likely to require significant capital investment in decar

177、bonizing the electrical grid and in specific technologies used in smelting and recycling.A recent study from Mission Possible Partnership,working in collaboration with the International Aluminium Institute,82 estimates that approximately$1 trillion in investment is needed for the transition to a low

178、-carbon upstream aluminum sector,with the majority of investment used to decarbonize electricity supplies.83 This figure does not include the cost of decarbonizing other aspects of aluminum production.A study from the World Economic Forum estimates that low-emission aluminum is expected to be availa

179、ble as early as 2030 and may command a premium of up to 40%.84 Decarbonizing the domestic aluminum industry is likely to require changes in the U.S.energy grid.85 At present,electricity is largely derived from nonrenewable energy sources.In 2021,20.1%of electricity generated in the United States cam

180、e from renewable sources,86 and much of this generation is distant from smelting facilities.In addition to decarbonizing the electricity sector,many technologies under development seek to address direct emissions in aluminum manufacturing,specifically targeting aluminum smelting and thermal energy a

181、nd fuels used in casting and fabrication.Inert Anodes.This technology could be used as an alternative to carbon anodes,which are consumed in electrolysis during smeltingthe most carbon-intensive process in aluminum manufacturing.Most research,at present,is focused on identifying the optimal anode ma

182、terial.Current materials being explored include ceramics,metal alloys,and sintered cermet,a ceramic-metal composite.Currently,the large majority of primary smelters use carbon anodes,which enable the process of electrolysis,with the combustion of these anodes emitting large quantities of carbon diox

183、ide.In contrast,inert anodes have little to no direct GHG emissions.87 ELYSIS,a joint venture between Alcoa,Rio Tinto,and Apple,seeks to create inert anodes that would eliminate GHG emissions from aluminum smelting,yielding carbon-free aluminum.The companies aim to demonstrate the viability of the t

184、echnology in 2023,make it commercially available by 2024,and produce larger volumes of carbon-free aluminum approximately two years later.88 82 Aluminum is the preferred spelling in the United States;aluminium is the preferred spelling in the United Kingdom and many other English-speaking nations.83

185、 Mission Possible Partnership,Making Net-Zero Aluminium Possible,September 2022,p.52,at https:/missionpossiblepartnership.org/wp-content/uploads/2022/10/Making-1.5-Aligned-Aluminium-possible.pdf.84 World Economic Forum,The Net-Zero Industry Tracker:Aluminium Industry,July 28,2022,at https:/www.wefor

186、um.org/reports/the-net-zero-industry-tracker/in-full/aluminium-industry/.85 William Alan Reinsch and Emily Benson,Decarbonizing Aluminum:Rolling Out a More Sustainable Sector,Center for Strategic and International Studies,February 25,2022,at https:/www.csis.org/analysis/decarbonizing-aluminum-rollin

187、g-out-more-sustainable-sector.86 U.S.Energy Information Administration,What is U.S.electricity generation by energy source?,March 4,2022,at https:/www.eia.gov/tools/faqs/faq.php?id=427&t=3.87 Mission Possible Partnership,Closing the Gap for Aluminium Emissions:Technologies to Accelerate Deep Decarbo

188、nization of Direct Emissions,December 2021,p.6,at https:/missionpossiblepartnership.org/wp-content/uploads/2021/12/Closing-the-Gap-for-Aluminium-Emissions.pdf.88 Alcoa,“Carbon free aluminium smelting a step closer:ELYSIS advances commercial demonstration and operates at industrial scale,”press relea

189、se,November 4,2021,at https:/ Manufacturing:Industry Trends and Sustainability Congressional Research Service 17 Carbon Capture,Utilization,and Storage(CCUS).89 CCUS units could be installed or retrofitted at smelting facilities to capture direct emissions resulting from industrial processes.The gas

190、es then may be stored underground or used to produce chemicals,such as methanol.In the aluminum industry,CCUS could be the most viable midterm solution for smelting facilities that use fossil fuels.90 Hydrogen.Hydrogen could be used to produce high-temperature heat to power secondary smelters but al

191、so could be used in alumina refining.There are three primary methods used to generate hydrogen:(1)gray hydrogen,produced using fossil fuels by splitting natural gas into hydrogen and carbon dioxide;(2)blue hydrogen,produced using the same process as gray hydrogen with the use of CCUS to capture roug

192、hly 90%of emissions;91 and(3)green hydrogen,produced via electrolyzers from electricity generated from renewable energy sources.Mechanical Vapor Recompression(MVR).MVRpiloted by Alcoa with financial support from the Australian governmentrecovers waste heat from steam that would otherwise be discharg

193、ed during alumina refining.The steam is captured and redirected to a compressor that raises its pressure and temperature so the steam may be reused.Alcoa is evaluating MVR powered by renewable energy and states that the technology could reduce carbon emissions from the alumina refining process by up

194、 to 70%.92 Another step in encouraging sustainability in the aluminum industry is to deploy better recycling technology to improve the quality of secondary aluminum.Sorting technologies,such as manual eddy current separators,make it possible to sort recycling inputs by material type.A more recent te

195、chnological development in recycling involves X-ray transmission technology,which uses sensors that determine differences in quality and material density and sorts metal products,including aluminum,accordingly.93 After scrap has been sorted,it is usually sent to secondary smelters where it is proces

196、sed into molten aluminum.More precise sorting enables secondary smelters to produce higher quality aluminum and wrought alloys.As domestic aluminum capacity shifts from primary to secondary smelting,developing and refining methodologies to increase the usability of the declining supply of quality sc

197、rap become more important.Considerations for Congress U.S.primary smelters seem likely to face greater headwinds due to a slowing economy and rising energy costs,which have led to recent production curtailments and idling of capacity.The large scale.89 For a discussion of the technology and policy c

198、onsiderations regarding carbon capture,utilization,and storage(CCUS),see CRS Report R44902,Carbon Capture and Sequestration(CCS)in the United States,by Angela C.Jones and Ashley J.Lawson.90 World Economic Forum and Accenture,Aluminium for Climate:Exploring pathways to decarbonize the aluminium indus

199、try,November 2020,p.15,at https:/www3.weforum.org/docs/WEF_Aluminium_for_Climate_2020.pdf.91 Michael Liebreich,Liebreich:Separating Hype from Hydrogen Part One:The Supply Side,BloombergNEF,October 8,2020,at https:/ Australian Renewable Energy Agency,Mechanical Vapour Recompression for Low Carbon Alu

200、mina Refining,October 26,2021,at https:/arena.gov.au/projects/mechanical-vapour-recompression-for-low-carbon-alumina-refining/.;and Alcoa,“Alcoa explores technology to reduce carbon emissions,”press release,May 20,2021,at https:/ technology can turn aluminum green,”recycling today,September 14,2021,

201、at https:/ Manufacturing:Industry Trends and Sustainability Congressional Research Service 18 amount of unused capacity in the upstream sector has been and remains an issue for domestic smelters.The adverse impact of global excess capacity on the domestic industry also remains a challenge.Secondary

202、and downstream aluminum producers,however,may experience improved commercial success over the next few years,as demand is expected to expand over the decade,domestic prices have registered record highs,and continued measures limiting imports remain in effect.Decarbonizing the aluminum sector present

203、s obstacles for domestic producers(see the“Challenges of Decarbonizing”section).The majority of the investment in decarbonization is likely to focus on improvements in the energy grid to decarbonize electricity supply;additional investment is likely to be made in reducing carbon emissions in aluminu

204、m production.P.L.117-169(commonly referred to as the Inflation Reduction Act of 2022),signed into law on August 16,2022,established the Advanced Industrial Facilities Deployment Program(50161)at the Department of Energy.This program seeks to provide federal financial assistance to a variety of manuf

205、acturing industries,including aluminum,that introduce advanced technologies in production processes that effectively reduce GHG emissions.The Department of Energy is to administer this program and award approximately$5.8 billion in financial assistance through September 2026.Eligible production faci

206、lities would carry out projects for“(1)the purchase and installation,or implementation,of advanced industrial technology;(2)retrofits,upgrades to,or operational improvements at an eligible facility to install or implement advanced industrial technology;or(3)engineering studies and other work needed

207、to prepare an eligible facility for activities.”94 The Secretary of Energy may provide financial assistance of up to 50%of the cost of a project carried out by an eligible production facility.In addition,the Secretary may give priority consideration of financial assistance to projects that demonstra

208、te“(1)the expected GHG emission reductions to be achieved by carrying out the project;(2)the extent to which the project would provide the greatest benefit for the greatest number of people within the area in which the eligible facility is located;and(3)whether the eligible entity participates or wo

209、uld participate in a partnership with purchasers of the output of the eligible facility.”95 The Trade Security Act of 2021(S.746),introduced by Senator Rob Portman,would amend Section 232 of the Trade Expansion Act of 1962 and require the Secretary of Defense to initiate investigations regarding whe

210、ther certain U.S.imports present a national security threat.In addition,it would allow Congress to block a presidential import adjustment through a joint resolution.Under current law,the Department of Commerce is charged with conducting Section 232 investigations and is required to consult with DOD

211、concerning imports under investigation.Prior Congresses have considered legislation to address concerns that inadequate domestic production of primary aluminum could pose a risk in a national security crisis.Section 852 of the FY2021 National Defense Authorization Act(FY2021 NDAA;P.L.116-283)require

212、d the Secretary of Defense to submit a report to Congress by March 1,2022,on how the Defense Production Act(DPA;50 U.S.C.4501 et seq.)could be used to increase domestic aluminum refining,processing,and manufacturing.It is unclear whether this report was submitted to Congress and/or if it has been de

213、classified for public viewing.Considering the deep integration of the U.S.and Canadian aluminum industries,if the DPA were to be used,it may treat primary aluminum produced by Canadian smelters as domestic content.96 94 Inflation Reduction Act of 2022(P.L.117-169,50161).95 Ibid.96 50 U.S.C.4552(7).U

214、.S.Aluminum Manufacturing:Industry Trends and Sustainability Congressional Research Service R47294 VERSION 1 NEW 19 Section 829 of the House-passed version of the FY2021 NDAA sought to add aluminum and aluminum alloys to DODs specialty metals provision(10 U.S.C.4863)and apply a domestic sourcing man

215、date to DOD and the Department of Transportation.Section 829 was not included in the FY2021 NDAA.Author Information Christopher D.Watson Analyst in Industrial Organization and Business Acknowledgements The author thanks Jamie Hutchinson,CRS Visual Information Specialist,for providing assistance with

216、 certain figures in this report.Disclaimer This document was prepared by the Congressional Research Service(CRS).CRS serves as nonpartisan shared staff to congressional committees and Members of Congress.It operates solely at the behest of and under the direction of Congress.Information in a CRS Rep

217、ort should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRSs institutional role.CRS Reports,as a work of the United States Government,are not subject to copyright protection in the United States

218、.Any CRS Report may be reproduced and distributed in its entirety without permission from CRS.However,as a CRS Report may include copyrighted images or material from a third party,you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material.