Against the backdrop of war-driven energy shocks and refinery closures, Europe and Russia’s aluminium industry has managed to keep production on a steady course. Primary aluminium output rose from 3.3 million tonnes in H1 2023 to 3.4 million tonnes in H1 2024, representing a 2.3 per cent increase and climbed further to 3.47 million tonnes, a 1.8 per cent gain compared with H1 2024.
The first quarter of 2025, particularly January to March, outperformed earlier years, though February slipped slightly compared with 2024.
Alumina production, by contrast, has been more variable. Production jumped from 2.5 million tonnes in 2023 to 2.9 million tonnes in 2024, a year-on-year increase of nearly 14.9 per cent. This sharp momentum faltered in 2025. H1 production slipped marginally to 2.8 million tonnes, a 0.4 per cent decline from 2024. Monthly data showed several weaker points in 2025, underlining alumina’s greater exposure to supply and energy disruptions.
Energy crisis and geopolitical pressures
The Russia–Ukraine war has been central to these shifts, disrupting gas supplies to Europe and driving electricity prices 40 to 60 per cent higher since 2022. With power costs making up as much as 60 per cent of aluminium smelting expenses, producers came under immense strain.
Germany illustrates the pressure vividly. Its output plunged by about 30 per cent in 2022 and a further 45 percent in 2023 as smelter closures mounted.
Even so, Europe-wide aluminium production, including Russia, held steady and managed modest growth through 2023–2025. Resilience came from efficiency improvements, global aluminium prices in the USD 2,500–USD 2,700 per tonne range, and greater supply chain diversification.
EU imports of Russian aluminium fell to around six per cent in 2024, compared with far higher levels pre-war, pushing domestic output higher and prompting alternative sourcing from the Middle East, India, and Southeast Asia. Alumina, meanwhile, remained vulnerable to raw material constraints and energy volatility, swinging sharply in 2024 before easing in 2025.
Measures to maintain stability
To cope, producers modernised equipment, optimised energy systems, and leaned on renewables such as hydro power. Elevated aluminium prices gave them the financial buffer to absorb costs and reinvest in efficiency. Infrastructure diversification also became vital, with new rail and shipping routes helping bypass disrupted supply lines.
By 2023, 78 per cent of electricity used in primary production came from renewables, up from 67 per cent in 2015. Adoption of low-carbon technologies like inert anode smelting reduced both energy use and emissions, cutting the industry’s carbon footprint by more than half since 1990. Despite some smelter closures, efficiency gains and policy support ensured production stability.
Industry leaders show the way
Several producers illustrate how the sector is adapting under pressure. Hydro Aluminium, with smelters in Norway, the UK, and Germany, relies heavily on hydro power and modernization through its GREENAL strategy, which focuses on renewables, circular economy practices, and innovation.
Aluminij Mostar in Bosnia and Herzegovina operates entirely on certified renewable electricity and is expanding solar capacity, while also emphasising recycling to cut costs and emissions.
Rio Tinto’s ISAL smelter in Iceland benefits from hydroelectric power and is advancing the ELYSIS project, a breakthrough in low-carbon smelting technology aimed at eliminating direct carbon emissions.
Aludium in Spain and across Europe combines primary output with large-scale recycling, reducing energy needs by up to 95 per cent compared with traditional smelting and insulating operations from volatile energy prices.
Together, these companies show how renewable energy, recycling, and innovation are being used to sustain production despite high costs and geopolitical strain.
Refinery closures and import dependence
The alumina sector has been hit harder. Romania’s Alum Tulcea refinery, with 600,000 tonnes annual capacity, shut in 2022 due to soaring power costs, forcing Alro Slatina smelter to halt operations. Other closures and cutbacks followed at Aluminium Dunkerque in France and Slovalco in Slovakia between 2021 and 2023.
Today, only a handful of refineries remain, including Rusal Aughinish in Ireland with a 1.9 million tonne capacity and Stade in Germany, focused on chemical-grade alumina. The decline has left Europe increasingly reliant on imports from Guinea, Brazil, and Australia, raising supply risks and stock fluctuations.
Stockpiling as a safety net
To cushion against these risks, producers and traders have built up alumina inventories. Stockpiling secures raw materials during supply interruptions or price spikes, smooths fluctuations in imports and domestic output, and helps capture pricing opportunities in global markets. It also explains why alumina output sometimes exceeds immediate smelter demand, with part of the production directed into storage.
Between 2023 and 2025, Europe and Russia’s aluminium and alumina industries have faced war, sanctions, and volatile energy costs. Aluminium has advanced steadily, alumina has swung sharply, and both have had to adapt to a difficult landscape. By leaning on efficiency, renewables, recycling, and stockpiling, producers have kept operations stable while laying the foundations for a more resilient and sustainable future.
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