Norwegian aluminium producer Norsk Hydro has produced aluminium for the first time using HalZero, its electrolysis technology designed to eliminate direct carbon dioxide emissions. Separately, majority-owned Slovalco has started restoring primary aluminium production at its smelter in Slovakia, with an investment of €100 million. The initiatives involve both developing a new production process and bringing existing capacity back into operation.
HalZero moves from laboratory research to testing
HalZero is designed to replace the Hall-Héroult electrolysis process, which has been used for more than a century. In conventional production, carbon anodes react with oxygen released from alumina, generating carbon dioxide. Hydro’s alternative process first converts alumina into aluminium chloride, which is then electrolysed in a system designed to keep chlorine and carbon within closed process loops.
Developed since 2016 with Norwegian research institutions, including NTNU and SINTEF, HalZero has now produced aluminium through its core electrolysis process beyond laboratory conditions. The alternative process is not yet commercially ready, and Hydro said current testing still generates some carbon dioxide because not all processing stages have been integrated into a closed-loop system.
Norwegian state-owned agency Enova provided approximately €13.5 million in 2023 for the research facility in Porsgrunn, Norway-based site, which began operating in January 2026. Enova has since awarded a further €7.8 million for engineering and planning for a larger industrial pilot. The funding does not approve construction of the pilot, and Hydro has announced neither a final investment decision nor a timetable for commercial deployment.
The next phase will integrate the main processing stages and test operational reliability, energy consumption, equipment durability and product quality. HalZero must demonstrate that reduced emissions can be achieved with competitive investment and operating costs, as well as the required production performance.
Slovalco works to restore primary aluminium capacity
Slovalco began restarting production in late August 2026 under an agreement establishing revised operating conditions. The smelter suspended primary aluminium production in 2022 after soaring electricity prices and inadequate compensation for indirect carbon costs weakened its competitiveness. The restart is expected to support more than 200 jobs.
The first phase targets annual production capacity of 75,000 tonnes, compared with the smelter’s total installed capacity of approximately 175,000 tonnes. The programme involves about €100 million in investment. Hydro owns 55.3% of Slovalco, while Penta Investments holds the remaining 44.7%.
A further 100,000 tonnes of annual capacity could potentially be restored in a later phase, subject to electricity arrangements and regulatory conditions beyond 2030. Slovalco’s next major milestone is reaching 75,000 tonnes of annual capacity by February 2027.
Power costs and carbon compensation underpin the restart
The restart follows a long-term electricity purchase agreement with Slovak state-owned Vodohospodárska výstavba, giving the smelter greater visibility over future power costs. The broader framework also includes compensation for indirect carbon costs, which arise when electricity generators pass EU Emissions Trading System expenses through to wholesale electricity prices. The agreement was conditional on European Commission approval of the revised Slovak compensation scheme.
Aluminium smelting requires continuous, electricity-intensive operations, and facilities using relatively low-carbon power can still face indirect carbon-cost exposure through their electricity procurement arrangements. The restart also highlights a limitation of the EU’s Carbon Border Adjustment Mechanism (CBAM): although aluminium is covered, the mechanism does not directly remove European smelters’ electricity-cost disadvantages. Competitive power contracts and compensation for indirect carbon costs therefore remain important to domestic production.
For European automotive manufacturers, electricity-network suppliers and renewable energy companies, restored primary aluminium capacity could improve access to regional metal supplies, particularly as demand for lower-carbon materials increases.
Hydro reports higher quarterly earnings and lower investment guidance
Hydro’s third-quarter adjusted EBITDA was approximately €868 million, up from €573 million a year earlier. The company attributed the increase to higher aluminium prices, strong Norwegian production, and improved recycling and extrusion earnings. Norwegian smelters recorded record liquid-metal production, while stronger margins supported downstream operations.
Free cash flow was approximately €134 million, reflecting increased working-capital requirements. Hydro reduced its full-year capital expenditure guidance to approximately €1.19 billion from €1.29 billion, maintaining investment discipline despite stronger earnings.
Slovalco offers a relatively near-term route to restoring production, while HalZero remains a research and development programme requiring further industrial testing. For HalZero, the next priority is to demonstrate that its alternative electrolysis process can operate reliably and economically at industrial scale. The projects address the challenge of developing lower-emission aluminium production while preserving existing industrial capacity in Europe.