Hydro to Invest $154 Million to Boost Europe’s Low-Carbon Aluminium Supply Chain

Hydro, a leading aluminium and renewable energy company, is set to invest NOK 1.65 billion (approximately $154 million) in constructing a new wire rod casthouse at its aluminium smelter in Karmøy, Norway. Scheduled to begin production in the first quarter of 2028, the facility will supply low-carbon aluminium for use in critical power infrastructure across Europe. This marks Hydro’s largest investment in Norway in a decade and reinforces the country’s role as a key supplier of sustainable materials for the energy transition.

Supporting Europe’s Energy Infrastructure with Sustainable Aluminium

The new casthouse will add 110,000 tonnes of annual production capacity to Hydro’s operations, focusing on aluminium wire for high-voltage power cables. With aluminium classified as a critical raw material by the European Union, this expansion positions Hydro to meet the growing demand for lightweight, durable, and recyclable conductors essential to renewable energy systems.

Eivind Kallevik, President and CEO of Hydro, stated, 

“This investment will expand the capacity of wire rod to supply our customers with low-carbon solutions needed to develop and expand Europe’s most critical infrastructure. This demonstrates that a productive aluminium industry has good growth opportunities in Norway,”

Aluminium’s Role in Europe’s Energy Transition

As Europe accelerates its transition to renewable energy, aluminium plays a crucial role in power transmission due to its conductivity and weight advantages over copper. An aluminium conductor weighs about 50% less than a copper equivalent, enabling more efficient and sustainable energy distribution.

Kallevik emphasized,

“Europe’s energy transition is about more renewable power production, and the power produced must be transported over long distances. Aluminium is crucial for transporting electricity to where it is needed.”

Norway currently supplies 40% of Europe’s aluminium production, and this expansion will help ensure that Europe’s electrification efforts are backed by stable, low-carbon materials.

Growing Market Demand for Low-Carbon and Recycled Aluminium

Despite global market volatility and subdued industrial demand, Hydro reports a continued rise in low-carbon aluminium sales, driven by growing awareness of the need for renewable materials in renewable energy projects.

“Despite generally weaker demand in 2024, Hydro sold more low-carbon and recycled aluminium last year than in both 2023 and our record year in 2022,” Kallevik noted.

Future Outlook and Strategic Importance

The investment, part of Hydro’s annual NOK 15 billion investment plan, is pending final approval in Q4 2025. The new casthouse will enhance Hydro’s product flexibility amid challenges in automotive and building systems markets, while solidifying its role in Europe’s decarbonization journey.

“Our ambition is for Hydro to play a key role as a stable, reliable supplier of the aluminium solutions Europe needs to succeed,” Kallevik concluded.

Hydro’s Karmøy facility is one of Europe’s largest aluminium production sites, with 270,000 tonnes of primary aluminium and 220,000 tonnes of casthouse products annually.