Throughout 2025, geopolitical tension and heightened rivalry among major powers added pressure on the global economy and our markets. Operating in forty countries, these developments have in recent years had an impact on our entire value chain with a particular pressure on our downstream activities. However, our geographic spread and our broad presence across the value chain also makes us more diversified and therefore more resilient.
In parallel, the EU remained committed to the Green Deal and we experienced renewed momentum for industrial competitiveness, especially in Europe. Security policy was rising on the global agenda, and the EU, the U.S. and NATO defined aluminium as a critical raw material. Low-carbon aluminium plays a vital role in ensuring robustness and driving the green transition. We know that what we produce, where we produce it and how we produce it is more important than ever.
While we cannot control external circumstances, we are committed to managing what is within our control. That is why we have implemented targeted improvement and commercial initiatives to strengthen Hydro’s agility and resilience. Our aim is to ensure that we continue to grow with the right structure and priorities, maintaining our commitment to accelerate the green aluminium transition.
Safety of our people is our top priority
The health and safety of our employees is fundamental to Hydro’s success. Ensuring a safe workplace every single day for our 32,000 colleagues is our foremost priority. And we know that when our people are safe, we have a solid basis for stable and predictable operations. In 2025, we continued our strong track record, maintaining consistently low incident rates throughout the year.
In 2025, the average Total Recordable Injuries (TRI) per million hours worked was 1.8. The number of High Risk Incidents (HRI) was 0.5. These numbers are the lowest ever reported. The positive development on safety reflects the improvement mindset and commitment throughout our organization.
Growth despite challenging markets
We delivered an adjusted EBITDA of NOK 28.9 billion, and corresponding adjusted return on average capital employed (ARoaCE) of 10.2 percent, above our target of 10 percent over the cycle. These results, during challenging market conditions, demonstrate the underlying strength and resilience of our business.
Improved earnings allow for competitive shareholder returns. Since 2021, we have distributed NOK 37.6 billion to shareholders, with a proposal to pay out another NOK 5.9 billion for 2025, representing 60 percent of adjusted net income.
We have made progress on our performance and capital discipline measures. The improvement program announced in late 2024 delivered NOK 1.4 billion in improvements last year, achieving close to twice the target level. Midway through the year we reduced our capex guiding for 2025 by NOK 1.5 billion to adapt to market realities. This will continue into 2026, showing the flexibility in our strategy to adapt the pace of growth with the market realities. We have also streamlined our operations by phasing out our batteries and hydrogen business units, reflecting our proactive approach to evolving market challenges.
Alongside strengthening our core business, we have made some difficult yet necessary decisions to optimize our workforce. This includes restructuring processes in Extrusions with reductions in employees and a proposal to close five extrusion plants in Europe during 2026. In addition, we conducted a strategic workforce reduction where the total number of employees that have left or will leave the company within the first half of 2026 is around 850. These processes are challenging and impact our people. However, they are essential steps to ensure we remain resilient and responsible in a changing world. Throughout these transitions, we remain committed to conduct the processes with care, ensuring close collaboration with employee representatives.
Executing on the 2030 strategy
We remain committed to our 2030 ambition of pioneering the green aluminium transition, powered by renewable energy. We are confident in our long-term direction, but recognize the need to adjust the pace and scope of our growth ambitions in line with market developments. Following the annual strategy review process, the Board of Directors reaffirmed Hydro’s strategic direction while clarifying priorities to address this. Our strategy continues to rest on four main pillars:
- Drive profitable growth in Recycling and Extrusions
- Scale renewable power generation
- Execute on ambitious decarbonization and technology road map, and step up to contribute to a nature positive and just transition
- Shape the market for low-carbon aluminium through commercial partnerships
In 2025, we achieved significant milestones throughout our value chain, making us well positioned to reach our strategic goals.
Drive profitable growth in Recycling and Extrusions
Extrusions and Recycling have experienced softer demand than expected, and the recycling margins have been under pressure. These challenges made us fall short of the 2025 targets, and we have postponed some of the 2030 targets. Nevertheless, we are convinced that the fundamental drivers are still in place, and we are actively executing our plans for cost optimization and productivity improvements, while accelerating investments in both Recycling and Extrusions. Throughout 2025, we have implemented a range of measures to better position these areas for future growth.
In Extrusions, the year started with a revised adjusted EBITDA outlook from NOK 4.5-5.5 billion to NOK 3.5-4.5 billion due to uncertain markets. We have increased efforts on cost optimization and productivity improvement. These measures are shaping a more robust Extrusions portfolio set for growth.
Within Recycling, we expect growth potential to return as market dynamics normalize, supported by growth projects, improved hot metal cost and commercial initiatives. In 2025, we expanded the Recycling portfolio by investing in construction of a recycling plant in Torija, Spain, and we took steps to finalize the integration of Alumetal. These initiatives will strengthen the European circular economy and Hydro’s position within recycling.
Despite weaker markets both in Extrusions and Recycling, we remain committed to our long-term growth agenda. In addition to the investment in a first of its kind all-electric extrusion press line at our facility in Gainesville, Georgia. we launched our first U.S. university research partnership with the University of Michigan aiming to advance aluminium and extrusion alloy development. Industry and science need to work together to develop new solutions, and this partnership aim to translate innovation rapidly from lab to production.
Scale renewable power generation
Reliable access to renewable power at competitive prices is critical to keep a low-carbon footprint. It is essential to continue building sufficient capacity to meet the growing demand in the years ahead.
The sourcing situation for the smelters remains robust through 2030, but we continue to actively pursue cost competitive renewable power opportunities as this is key to succeed with our low-carbon strategy in the long-term. In 2025, signing long-term power contracts with Hafslund Kraft AS, NTE, and the agreement in principle on a new long-term power contract until 2045 for Alouette, are important steps to further strengthen competitiveness and our low-carbon position.
While pursuing long-term agreements, we are also making investments in captive resources. In 2025, we decided to invest in a new pumped storage power plant. The Illvatn plant is our largest hydropower development in over 20 years and will provide 107 GWh of new annual renewable power production, reinforcing our commitment to sustainable growth and energy security.
Execute on ambitious decarbonization and technology road map, and step up to contribute to a nature positive and just transition
Decarbonization initiatives are being conducted across the value chain, and we are ahead of plans to reach our 2030 goals, demonstrated by a 15 percent reduction of CO2 surpassing the initial 2025 target of ten percent. Decarbonization and proactively advancing our social initiatives are at the core of our decisions. In 2025, we made significant progress on sustainability across our operations, driven by dedicated climate, nature and social initiatives.
A major milestone in this respect is the ramp up of the fuel switch at Alunorte, which has yielded an annual reduction in CO2 emissions of 700,000 tonnes. In addition, Alunorte invested in two new electric boilers to reduce CO2 emissions by up to 550,000 tonnes per year.
In line with our roadmap toward net-zero production by 2050 or earlier, we are continuing the evaluation of carbon capture technologies as a solution for decarbonizing existing assets. The development of our proprietary carbon-free HalZero technology is progressing well. In December, we commenced operations at our stage two test facility in Porsgrunn, Norway. We are also nearing completion for the green hydrogen pilot at our Høyanger recycling facility in Norway, which will be our first industrial scale pilot replacing natural gas in one furnace which will reduce the carbon footprint to near-zero. Operations are expected to start in the first half of 2026.
In 2024, we launched the Corridor program together with Mercedes-Benz. This is a multisector program aiming to improve environmental and social conditions along the Paragominas-Barcarena pipeline in the state of Pará in Northern Brazil. In 2025, three new partners joined the coalition, Belterra Agroflorestas, Mitsui & Co. and Mitsui Foundation.
Another important step in line with our purpose of creating a more viable society is our strategic partnership with the Norwegian Red Cross, launched in 2025. The Red Cross shares our commitment to strengthening local communities and this is in line with our social responsibility strategy.
Shape the market for low-carbon aluminium through commercial partnerships
Partnerships and collaboration with our customers are crucial to the success of our 2030 strategy. An integrated value chain, combined with emissions significantly lower than the industry average, is increasingly valued by our customers. Clear evidence is sales of products with a lower-carbon footprint were more than 50 percent higher by value in 2025 than in 2024.
Aluminium’s potential as construction material in public infrastructure is growing. We decided to invest in a new 110,000 tonne wire rod casthouse at Karmøy for use in critical energy infrastructure in Europe. Shortly after, we signed a partnership with the European cable producer NKT to guarantee supply of low-carbon aluminium. Partnerships like this provide predictability when making large, long-term investments. The recycled aluminium bridge “Hangarbrua” in Trondheim, Norway, further demonstrates aluminium’s potential as a more sustainable construction material for the future.
We continue to expand into new markets with our low-carbon solutions. For example, Vode Lighting became the first company in North America to incorporate Hydro CIRCAL into their products, helping to reduce emissions and promote a circular economy. Likewise, we have also secured the first automotive offtake of Hydro CIRCAL in the U.S. market.
Despite challenges in the automotive sector, low-carbon solutions are advancing in this industry as well. Our collaboration with Mercedes-Benz is contributing to the decarbonization of their value chain, as seen in the launch of the new electric CLA featuring Hydro REDUXA, produced in Årdal.
In 2025, we received significant design recognitions, including top honors at the Venice Biennale, a spot on TIME’s list of the World’s greatest places for our floating sauna in Oslo, multiple awards for the 100R recycling project and we were selected to deliver a recycled aluminium façade for Frieze London. These accolades strengthen our brand and increase awareness for embedded emissions, circularity, and low-carbon solutions.
Taking steps to reach our 2030 targets
In an increasingly complex geopolitical landscape, Hydro has a role to play in a growing market for more critical and greener materials. Our presence across the entire value chain makes us more diverse and therefore more robust in times of instability. Over the past year, we have taken decisive actions to streamline our operations, ensuring greater agility in responding to market changes.
We continue to drive our 2030 strategy forward with undiminished strength. The achievements highlighted in this report confirm we are on the right track to reach our 2030 targets and there is a market for our low-carbon aluminium solutions.
Updated: February 13, 2026