Renewable-powered aluminium smelter snubbed for green energy funding

The federal government has backflipped on a commitment to make its Green Aluminium Production Credit scheme available to Rio Tinto's Bell Bay smelter, casting further doubt over the facility's future.It comes amid heightened uncertainty for the region, following the closure of the nearby Liberty Bell Bay manganese smelter, and protracted power negotiations with Tasmania's state-owned power company.Last year, Rio Tinto signed a one-year deal to keep the lights on at Bell Bay, but that agreement ends in December this year.The smelter is one of the biggest customers connected to Tasmania's grid, which is powered nearly entirely by renewable energy.However, on Tuesday Morning, federal Bass MP Jess Teesdale said that Bell Bay Aluminium would not be eligible for the $2 billion Green Aluminium Production Credit scheme."Not as the way the scheme is at the moment," she told 936 ABC Hobart.Jess Teesdale says Bell Bay Aluminium is not eligible for the federal government's Green Aluminium Production Credit scheme. (ABC News: Ashleigh Barraclough)However, Industry Minister Tim Ayres told ABC Northern Tasmania last January that Bell Bay Aluminium would be eligible for the scheme, which starts in 2028-29."The short answer is yes. This is a $2 billion announcement to secure the future of every Australian aluminium facility, including Bell Bay," he said.Prime Minister Anthony Albanese also referenced Bell Bay when announcing the scheme in Tomago, in New South Wales, on January 20 last year.Bell Bay Aluminium was included in the scheme when it was announced by Anthony Albanese in January 2025. (ABC News: Adam Kennedy)"What that [scheme] will do is target support to Australian aluminium smelters, including here [at Tomago], at Bell Bay, Gladstone, right throughout the supply chain process of Portland, to make sure that by providing these production credits, companies can invest with the certainty on what they want to do," Mr Albanese said.Today, Ms Teesdale claimed the government had been using Bell Bay as an example of "the pinnacle", saying "this is what everyone should be aiming toward".Tasmanian Industry Minister Felix Ellis said excluding Bell Bay from the scheme was "outrageous", calling on the federal government to deliver on its promise to the people of northern Tasmania.Felix Ellis is calling on the federal government to extend its green energy scheme to Bell Bay Aluminium. (ABC News: Ebony ten Broeke)"They were promised in black and white that northern Tasmania and Bell Bay specifically would be able to take part in the green aluminium production credit scheme." Mr Ellis said.The ABC has contacted Rio Tinto for comment.Power deal still in fluxThe debate over aluminium credits comes as negotiations continue for a new power deal at Bell Bay Aluminium, which employs around 600 people.Ms Teesdale said she understood Rio Tinto had set a deadline of August, or else there was a "very high risk the smelter would close"."I cannot believe that the state government still has refused to come to an agreement with BBA [Bell Bay Aluminium] — it just blows my mind," she said."There is no possible way that the north east economy can continue to hold as it is without BBA being present."Rio Tinto's Bell Bay aluminium smelter employs around 600 people. (ABC News)Ms Teesdale claimed she had tried to meet with Hydro on "multiple occasions", saying, "they will not contact me".A Hydro Tasmania spokesperson refuted this.They said Ms Teesdale had been offered briefings and meetings over the past 12 months but had not responded.They said negotiations with Rio Tinto were ongoing, and occurring in good faith."In negotiating with our major industrial customers, we seek to reach agreements that have value for the customer while still returning a commercial price for power on behalf of Tasmanians," the spokesperson said.A spokesperson for Hydro Tasmania says negotiations with Rio Tinto to secure a new power deal were ongoing. (ABC News: Luke Bowden)Asked if the state government needed to intervene, Mr Ellis said a "significantly concessional" offer had been put on the table.He also called again on the government to extend its Green Aluminium Production Credit scheme to Bell Bay Aluminium.If it closes, Bell Bay Aluminium would be the second smelter in the area to do so this year, following Liberty Bell Bay.The manganese smelter was placed into voluntary administration in March this year, and a buyer could not be found.A report by administrators EY said that the cost of a power agreement was central to a potential sale falling through.