Norsk Hydro has achieved its first aluminium production using its experimental HalZero electrolysis technology in Norway while advancing a €100 million restart of the Slovalco smelter in Slovakia. The two initiatives combine efforts to develop lower-emission aluminium production with the restoration of existing European industrial capacity.
Slovalco is targeting 75,000 tonnes of annual primary aluminium production, while HalZero is progressing towards an integrated industrial pilot. The developments come as European manufacturers seek reliable, lower-carbon aluminium supplies for automotive production, electricity networks, renewable energy, construction and advanced manufacturing.
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. Full-year capital expenditure guidance was reduced from €1.29 billion to approximately €1.19 billion.
HalZero Produces First Aluminium in Norway
The first aluminium produced using HalZero was achieved at Hydro’s Herøya research and test facility in Porsgrunn. The technology is being developed as an alternative to the conventional Hall-Héroult electrolysis process, which relies on carbon anodes and generates carbon dioxide during primary aluminium production.
HalZero uses a different processing route, first converting alumina into aluminium chloride, which is subsequently processed through an alternative electrolysis system. The technology is designed to retain chlorine and carbon within closed process loops, avoiding direct emissions associated with conventional anode consumption.
Hydro has been developing the technology since 2016, in cooperation with Norwegian research institutions NTNU and SINTEF. However, the current testing process still generates some carbon dioxide because not all processing stages have been integrated into a closed-loop system. Further engineering is required to demonstrate near-zero direct emissions, reliable equipment operation, consistent product quality and competitive energy consumption.
Enova Provides Additional Development Funding
Norway’s state-owned agency Enova provided approximately €13.5 million in 2023 to support construction and operation of the existing research facility, which began operating in January 2026. Enova has now awarded another €7.8 million for concept development and planning of a larger industrial pilot integrating the technology’s main processing stages.
The next phase will assess process control, corrosion resistance, chemical circulation, equipment durability, maintenance requirements and energy consumption. The pilot must also demonstrate continuous operation and establish the technology’s performance relative to conventional aluminium production. The latest funding covers engineering and planning, not construction authorisation. Hydro has not announced a final investment decision or commercial deployment timetable.
Slovalco Restarts Primary Aluminium Production
Hydro’s majority-owned Slovalco began restarting primary aluminium production in late August 2026 following an agreement with the Slovak government on long-term operating conditions.
The smelter had curtailed primary production in 2022 after rising European electricity prices and insufficient compensation for indirect carbon costs undermined its competitiveness. Recycling and associated industrial activities continued during the suspension.
The restart 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 by the end of February 2027, compared with the facility’s total installed capacity of approximately 175,000 tonnes. Hydro owns 55.3% of Slovalco, while Penta Investments holds 44.7%. The initial restart represents approximately 43% of installed primary aluminium capacity, with the remaining 100,000 tonnes potentially recoverable in a subsequent phase.
Electricity Contracts and EU Carbon Policy
The restart is supported by a long-term electricity purchase agreement with Slovak state-owned Vodohospodárska výstavba, providing greater visibility over future power costs.
The operating framework also includes compensation for indirect carbon costs passed through electricity prices under the EU Emissions Trading System (ETS). The July restart agreement was conditional on European Commission approval of the updated Slovak compensation scheme.
The development highlights the relationship between electricity procurement, ETS compensation and the Carbon Border Adjustment Mechanism (CBAM), which entered its definitive phase in January 2026 and covers aluminium imports. Although CBAM addresses carbon-related costs associated with qualifying imported products, it does not directly eliminate the electricity-cost disadvantage faced by European smelters. Long-term power agreements and compensation mechanisms therefore remain important to domestic production competitiveness.
Hydro’s Financial Position and Investment Programme
Hydro’s third-quarter results included record liquid-metal production at its Norwegian smelters, alongside improved recycling and extrusion margins. However, higher working-capital requirements partly offset earnings growth, with free cash flow reaching approximately €134 million.
The company is pursuing two distinct investment priorities: developing HalZero as a potential alternative to conventional aluminium electrolysis and restoring existing production capacity at Slovalco. The immediate operational milestone is the planned recovery of 75,000 tonnes of annual primary aluminium capacity in Slovakia by February 2027, while HalZero must progress through integrated industrial testing before its commercial feasibility can be established.
