Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 11

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 11
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against market conviction and evaluateareas where we see upside potentialbeyond our peers. |

Policy fragmentation and climate action In 2024, we continued to see strong government intervention in the market and an increasingly fragmented policy landscape as countries competed to strengthen their position in key sectors. In the 2 years since the US Inflation Reduction Act was signed, tax credits have been announced for a range of sectors, and hundreds of billions of dollars of additional investments have been announced by US and foreign companies. Other regions have continued to respond with legislation designed to accelerate decarbonisation, bolster local manufacturing and enhance supply security (such as the recently announced EU Net Zero Industry Act ). While these initiatives have helped support the energy transition in some ways, such as by increasing electric vehicle (EV) production capacity and renewable projects, the fragmented climate policy landscape and current economic uncertainty have hindered global momentum on decarbonisation. Global CO 2 emissions are expected to increase moderately in 2024, in line with the past 2 years. This is particularly apparent for sectors that require significant capital to switch to fossil-fuel alternatives. In 2024, we have also seen policy support, particularly in the US, continue to drift away from climate action and towards sectors deemed critical to national security, such as defence, communications and computing. Western reindustrialisation To date, Western reindustrialisation in processing (smelting and refining) and manufacturing has been limited due to strong low-cost international competition and the widening capital intensity gap with China, where participants continue to hone their project development and technological capabilities. To address these challenges, Western governments have adopted increasingly protectionist approaches to support regional competitiveness and reduce import dependencies for strategic sectors. In 2024, the US announced tariff increases on a range of Chinese goods, including semiconductors and solar cells (tariffs increased from 25% to 50%), EV batteries (from 7.5% to 25%) and EVs (from 25% to 100%). The EU also announced an increase in tariffs on imported EVs from a 10% base rate to up to 45.3% for some Chinese-built EVs. Importantly, both the US and EU have increased tariff and safeguard measures to ensure their remaining processing base in steel and aluminium smelting is preserved. This is vital in reducing raw material supply bottleneck risks. Access to materials In 2024, we also saw continued heightened fears around raw material supply disruptions, triggered by escalating conflicts and retaliatory trade measures (ie increased tariffs