Insight

Aluminium incentive price: A higher price required for a cleaner supply

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There is a new environment that dominates investment decisions. Future aluminium supply cannot longer rely on fossils fuel for its energy. The current production process may also need to change for one that is carbon neutral. All these considerations make investing in aluminium assets risky as rapidly changing emission regulations can create large carbon liabilities to investors. In this Insight, we calculate the price that investors need (Incentive Price) to invest in aluminium projects.

Table of contents

  • Executive summary
    • The price to pay for carbon emissions
    • or the price to pay for the abatement of emissions
    • Which countries are likely to host new aluminium smelter capacity?
    • Base case aluminium incentive price
    • Moving up in the value chain, which countries are likely to host new alumina refinery capacity?
    • Base case alumina incentive price
  • Assumptions used to construct incentive prices

Tables and charts

This report includes 4 images and tables including:

  • Aluminium requirements
  • Internal rate of returns used in the calculations
  • Aluminium incentive price, capital intensity and location
  • Alumina incentive price, capital intensity and location

What's included

This report contains:

  • Document

    Aluminium incentive price: A higher price required for a cleaner supply

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