In Slovakia, Slovalco began restarting primary aluminium production in late August 2026 after suspending it in 2022. The approximately €100 million programme initially targets 75,000 tonnes of annual capacity at the Žiar nad Hronom smelter. Separately, Norwegian producer Norsk Hydro has produced aluminium for the first time using HalZero, an electrolysis technology designed to avoid direct carbon dioxide emissions.
Slovalco Targets 75,000 Tonnes of Annual Capacity
Slovalco suspended primary production after sharply higher electricity prices and insufficient compensation for indirect carbon costs weakened its competitiveness. The restart followed an agreement setting revised operating conditions and is expected to support more than 200 jobs. Its first phase targets 75,000 tonnes of annual production by February 2027, against total installed capacity of approximately 175,000 tonnes.
Hydro owns 55.3% of Slovalco, with Penta Investments holding the other 44.7%. A subsequent phase could restore another 100,000 tonnes of annual capacity, depending on electricity arrangements and regulatory conditions beyond 2030. Restored output could improve access to regional metal supplies for European automotive manufacturers, electricity-network suppliers and renewable energy companies, particularly as demand for lower-carbon materials increases.
Power Contracts and Carbon-Cost Compensation
A long-term electricity purchase agreement with Slovak state-owned Vodohospodárska výstavba gives Slovalco greater visibility over future power costs. The wider framework includes compensation for indirect carbon costs when generators pass EU Emissions Trading System (EU ETS) expenses through to wholesale electricity prices. The agreement was conditional on European Commission approval of the revised Slovak compensation scheme.
Aluminium smelters need continuous, electricity-intensive operations, and even plants using relatively low-carbon power can face indirect carbon-cost exposure through their electricity purchases. Aluminium is covered by the European Union’s Carbon Border Adjustment Mechanism (CBAM), but the mechanism does not directly remove the electricity-cost disadvantage faced by European smelters. Competitive power contracts and compensation for indirect carbon costs therefore remain important to domestic production.
HalZero Produces Aluminium at Porsgrunn Facility
Hydro disclosed its first HalZero aluminium production in its third-quarter results, following work at its Porsgrunn research facility in Norway. The technology is intended to replace the Hall-Héroult electrolysis process, used for more than a century. In conventional production, carbon anodes react with oxygen released from alumina and generate carbon dioxide.
HalZero first converts alumina into aluminium chloride, then processes it through electrolysis designed to keep chlorine and carbon in closed loops. This is intended to eliminate the direct CO2 emissions associated with consuming conventional carbon anodes. Developed since 2016 with Norwegian research institutions including NTNU and SINTEF, the core process has now produced aluminium beyond laboratory conditions.
The alternative production technology is not yet commercially ready. Hydro said current tests still generate some carbon dioxide because all processing stages have not been integrated into a closed-loop system. The next phase will integrate the main stages and test operational reliability, energy consumption, equipment durability and product quality.
Norwegian state-owned agency Enova provided approximately €13.5 million in 2023 for the existing research facility, which began operating in January 2026. It later awarded another €7.8 million for engineering and planning a larger industrial pilot, but that funding does not approve its construction. Hydro has announced neither a final investment decision nor a commercial deployment timetable; HalZero still needs to demonstrate lower emissions alongside competitive investment costs, operating expenses and production performance at industrial scale.
Third-Quarter Earnings and Capital Spending
Hydro reported third-quarter adjusted EBITDA of approximately €868 million, up from €573 million a year earlier. Higher aluminium prices, strong Norwegian production and improved recycling and extrusion earnings supported the result. Norwegian smelters achieved 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 from €1.29 billion to approximately €1.19 billion, maintaining investment discipline despite stronger earnings. Slovalco’s production restart has a nearer-term commercial timetable, while HalZero remains a research and development programme requiring further industrial testing.
