Norwegian aluminium producer Norsk Hydro has achieved its first aluminium production using HalZero, an innovative electrolysis technology designed to eliminate direct carbon dioxide emissions, while advancing a €100 million restart of primary aluminium production in Slovakia. The developments highlight Europe’s efforts to strengthen domestic metals production, reduce industrial emissions and improve security of supply.
Hydro confirmed the HalZero milestone in its third-quarter results, reporting successful aluminium production at its research facility in Porsgrunn, Norway. Separately, majority-owned Slovalco has begun restoring operations at its smelter in Žiar nad Hronom, targeting 75,000 tonnes of annual primary aluminium capacity.
The two initiatives address different challenges facing the European aluminium industry: developing cleaner production technologies and restoring existing capacity through competitive electricity and regulatory arrangements.
HalZero Advances Alternative Aluminium Production
HalZero is designed to replace the conventional Hall-Héroult electrolysis process, which has been used for more than a century. Traditional production relies on carbon anodes that react with oxygen released from alumina, generating carbon dioxide emissions.
Hydro’s alternative technology first converts alumina into aluminium chloride, which is subsequently processed through an electrolysis system designed to retain chlorine and carbon in closed process loops. The objective is to produce aluminium without the direct CO2 emissions associated with conventional carbon-anode consumption.
Developed since 2016 in cooperation with Norwegian research institutions, including NTNU and SINTEF, HalZero has now demonstrated that its core electrolysis process can produce aluminium beyond laboratory conditions. The technology is not yet commercially ready. Hydro acknowledged that the current testing process 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 existing research facility, which began operating in January 2026. It has subsequently awarded another €7.8 million for engineering and planning of a larger industrial pilot.
The next phase will focus on integrating the main processing stages and testing operational reliability, energy consumption, equipment durability and product quality. The latest funding does not constitute approval for pilot construction, and Hydro has not announced a final investment decision or commercial deployment timetable. HalZero must ultimately demonstrate that lower emissions can be achieved alongside competitive investment costs, operating expenses and production performance.
Slovalco Restarts Production Following Energy Crisis
While HalZero represents a longer-term technological development, the Slovalco restart offers a more immediate contribution to European aluminium supply.
The Slovak smelter began restarting production in late August 2026 following an agreement establishing revised operating conditions. Primary aluminium production had been suspended in 2022 after soaring electricity prices and insufficient compensation for indirect carbon costs undermined the facility’s competitiveness.
The restart programme involves approximately €100 million in investment and is expected to support more than 200 jobs. The first phase targets 75,000 tonnes of annual production capacity, compared with the smelter’s total installed capacity of approximately 175,000 tonnes. 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 subsequent phase, depending on electricity arrangements and regulatory conditions beyond 2030.
Electricity Costs and Carbon Compensation Remain Critical
The restart follows a long-term electricity purchase agreement with Slovak state-owned Vodohospodárska výstavba, providing greater visibility over future power costs. The wider framework also includes compensation for indirect carbon costs arising when electricity generators pass EU Emissions Trading System expenses into wholesale electricity prices.
These arrangements are important because aluminium smelting requires continuous, electricity-intensive operations. Even facilities using relatively low-carbon power can face indirect carbon-cost exposure through their electricity procurement arrangements. The agreement was conditional on European Commission approval of the revised Slovak compensation scheme.
Slovalco’s recovery also highlights the limitations of the EU’s Carbon Border Adjustment Mechanism (CBAM). Although aluminium is covered by the mechanism, CBAM does not directly eliminate the electricity-cost disadvantages faced by European smelters. Competitive power contracts and indirect carbon-cost compensation therefore remain essential to domestic production.
For European automotive manufacturers, electricity-network suppliers and renewable energy companies, the restoration of primary aluminium capacity could improve access to regional metal supplies, particularly as demand for lower-carbon materials increases.
Hydro’s Financial Performance Supports Investment
Hydro reported third-quarter adjusted EBITDA of approximately €868 million, compared with €573 million a year earlier, supported by higher aluminium prices, strong Norwegian production and improved recycling and extrusion earnings. Norwegian smelters achieved record liquid-metal production, while stronger margins supported downstream operations. Free cash flow reached approximately €134 million, reflecting increased working-capital requirements.
The company also reduced its full-year capital expenditure guidance to approximately €1.19 billion, from €1.29 billion, maintaining investment discipline despite stronger earnings.
The two aluminium initiatives have different commercial timelines. Slovalco offers a relatively near-term opportunity to restore production and strengthen European supply, while HalZero remains a research and development programme requiring further industrial testing. The next major milestone for Slovalco is reaching 75,000 tonnes of annual capacity by February 2027. For HalZero, the priority is demonstrating that its alternative electrolysis process can operate reliably and economically at industrial scale. Together, the projects illustrate Europe’s dual challenge: developing lower-emission aluminium production while preserving the existing industrial capacity needed to maintain a competitive domestic metals industry.
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