(March 25): The first new US aluminium smelter in 45 years may be built as part of about US$6 billion (RM28.11 billion) in grants the Biden administration is awarding to companies in a bid to clean-up hard to decarbonise industries including metal, paper and glass.

Century Aluminum Co, once a central beneficiary of former president Donald Trump’s trade war, is set to receive as much as US$500 million in funding to build the facility, according to a statement on Monday. That would double the size of the nation’s current domestic production of the energy-intensive metal while also reducing emissions by an estimated 75%.

Domestic production of aluminium, used in solar panels, semiconductors and fighter jets, has been steadily declining for years. That’s happened even has demand increased, partly thanks to President Joe Biden’s signature climate law that’s lifted consumption of materials needed for the energy transition.

“It is difficult to overstate the significance of what this award will mean for the domestic aluminium industry,” said Joe Quinn, a vice president with SAFE, a Washington think-tank that advocates for US energy independence.

“A new domestic smelter puts the US back in the game and reverses our dangerous, decades-long decline in primary aluminium production,” Quinn said.

The project is one of 33 set to receive grants worth as much as US$500 million each as part of an Energy Department programme to reduce greenhouse gas emissions in energy intensive manufacturing industries, as well as revitalise industrial communities and strengthen US manufacturing competitiveness.

The money will be aimed at industries that account for nearly a quarter of US emissions, but are challenging and expensive to shift to lower-carbon technologies. Cleaning up these sectors will be critical if the White House wants to meet its goal of cutting greenhouse gas emissions 50% by 2030 and achieve net zero by mid-century.

Difficult-to-decarbonise sectors

In all, the Biden administration said, the projects are expected to reduce the equivalent of more than 14 million tonnes of carbon dioxide emissions each year — an amount equivalent to the annual emissions of three million gasoline-powered cars.

“These investments will slash emissions from these difficult-to-decarbonise sectors and ensure American businesses and American workers remain at the forefront of the global economy,” Energy Secretary Jennifer Granholm said in a statement.

Chicago-based Century Aluminum is evaluating potential locations for its new smelter project along the Mississippi River Basin, the White House said. Upon completion, the plant would produce high-purity metal used in defence applications and result in 1,000 new direct jobs for United Steelworkers, a union that holds significant support from President Joe Biden and recently endorsed his re-election efforts.

Other grants announced by the Energy Department included as much as US$500 million to steelmaker Cleveland-Cliffs Inc for plans to install equipment that would allow steel to be made using hydrogen and two electric melting furnaces at the company’s Middletown Works mill in Ohio. The company won an additional US$75 million to electrify production of a specialised steel needed for electric transformers and other parts of the electricity sector at its Butler Works plant north of Pittsburgh.

Other awards included as much as US$500 million to SSAB AB to build the first commercial-scale facility in the world to make fossil-fuel-free steel using 100% hydrogen in Perry County, Mississippi. The funding will also be used to expand the company’s Montpelier, Iowa low-carbon steelmaking facility, the administration said.

Exxon Mobil Corp got as much as US$332 million for a project to replace natural gas with hydrogen for ethylene production in Baytown, Texas, and Kraft Heinz Co received as much as US$171 million to for it’s “Delicious Decarbonisation” project to electrify a host of facilities.

Heidelberg Materials AG’s US subsidiary received as much as US$500 million to construct cement decarbonisation project, and Eastman Chemical Co recieved as much as US$375 million for the construction of a first-of-a-kind plastic molecular recycling facility.

“If done right, these projects can put us on the path to cleaner production of core products of the modern economy, while spurring the creation of good jobs,” said Christina Theodoridi, industrial policy director at the Natural Resources Defense Council.